Welcoming Treasurer Scott Morrison to the Tyro Fintech Hub today, the Head Andrew Corbett-Jones and Tyro CEO, Jost Stollmann, said customers would be the big winners if the banking sector was further opened up.
In this extract from his opening address, Stollmann said there was a “huge opportunity on our doorstep to lead the digital revolution in Australian financial services and in the broader business community”.
“As many of you would be aware, investment in fintech has grown to a staggering $30 billion globally, including $9 billion in Asia in the last four quarters alone.
This is important because the finance and insurance sector employs 450,000 people, and contributes $140 billion to our economy. This is a unique time in our economic history.
It really is amazing what can happen when we allow innovation and competition to thrive. Tyro is a living example of that.
Eleven years ago when the term ‘Fintech’ was not coined yet, and Tyro was a startup backed by three Aussies and a German entrepreneur, the Reserve Bank and the Prudential Regulator, APRA, recognised that more competition was needed in the Australian banking system.
Tyro is their vision realised. Back then they granted our start-up a special banking licence and ensured our access to the core banking system.
A year later, in 2006, Tyro was contracted by Medicare to provide the delivery of rebates in real-time through the domestic debit card system. Today, Tyro is the market leader. Medicare rebates are claimed on the spot and funds are deposited into the patient’s account in 11 seconds.
In 2015, Tyro was serving 15,000 SMEs with credit and debit card payment services, when APRA granted us a full banking licence to accept money on deposit and to offer loans.
This was an Australian first. Never in this country had a banking licence been granted to a technology company.
Thanks to the leadership and foresight of the policymakers and the regulators, Tyro began to develop what we are now calling next generation, or NextGen, banking. That means banking solutions that are fully contained in the cloud, totally integrated, frictionless and mobile. It means efficient banking.
This is important because efficient banking and access to cashflow-based lending are the two ingredients which are critical to small business growth.
There are 2.1 million small and medium sized businesses in Australia, and they play a pivotal role in the Australian economy.
NextGen banking boosts their growth so that they can create the jobs, products and services that will underpin our prosperity in the digital century.
Tyro is a success story. But Australia needs many more Tyros.
We are at a crossroads. And by ‘we’ I mean policymakers, regulators, innovators and entrepreneurs. We can sit on our laurels, having successfully encouraged a small amount of competition and innovation in financial services, or, we can continue to challenge the status quo and enable the best ideas to thrive.
I am convinced that smart public policy and regulation is the source of sustainable competitive advantage for Australia in its ambition to become a leading Asian financial services hub.
The regulatory sandbox scheme which allows early-phase businesses to test their products in a controlled environment is a much-needed step in the right direction.
It means more entrepreneurs will spend more time building business ideas and less time trying to meet complex financial services regulations.
But we need more. Consumers should have the right to decide themselves to grant access to the data and deposits that the banks hold on their behalf to third party fintech entrepreneurs, so that these fintechs can offer them more product choice, and better terms.
The UK and the EU understand this and are well-advanced with their Open Data and Open API movement.
I welcome the Treasurer’s Productivity Commission Inquiry into this matter.
If we get the policy settings right, the sector will open up, banks will survive, fintech will thrive and together we can solve the challenges of privacy and security.
That’s why the Tyro Fintech Hub was created, by entrepreneurs for entrepreneurs. Let us create the encouraging and enabling environment where the best ideas win.”