Constant changes to legislation imposed by the government are making it hard for the financial services industry to innovate, argues Managed Accounts Holdings executive chairman, Don Sharp.
Mr Sharp said it is becoming “almost impossible” for companies in Australia’s banking, wealth management and superannuation sector to build successful businesses because of legislative change.
“Ours is a reactive industry, prone to the continual winds of political and policy change from Canberra,” he said.
“Against this constant legislative and regulatory buffering, it remains challenging for the industry to properly invest and develop true innovation that drives stable, long-term positive change for the end consumer and the economy.”
Mr Sharp pointed to the uncertainty surrounding the proposed superannuation taxation policy, saying this is already putting pressure on financial services companies.
“Our industry is obligated to meet whatever shifts are made by government, and a fund [must find] a response to those shifts, whilst also minimising downside risk to the customer or fund member,” he said.
“The task of building a successful business is challenging at the best of times but add legislative change, and it becomes almost impossible.”
While Mr Sharp praised the level of effort being made by the fintech sector and the assistance given by ASIC, it is still a challenging time for the industry.
“These are positive measures. But my hesitation with endorsing most endeavours is in knowing what it takes from a financial and personal point of view to take a good idea, develop it into a business and then deliver a sustainable, long-term commercial proposition in a changing market,” he said.
“My advice to fintech entrepreneurs is to build for known regulatory events, and remain flexible enough to accommodate the inevitable rollercoaster of ongoing regulatory change.
“I also implore the policy makers to cast their gaze at longer horizons, avoiding the short-term fix mentality that has largely characterised the oversight of the financial services industry.”
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