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Early engagement required for FinTech success
The latest FinTechNZ Connect event series in Wellington, Christchurch and Auckland raised important issues, a constant theme being the need to engage early with authorities and business.
At our first event in Wellington on 28th June, we hosted founder and CEO Mel Gollan, who shared RIP Global’s innovation and going-global story. Liam Mason, Financial Markets Authority (FMA) Director of Regulation, then discussed the evolving regulatory landscape, including robo-advice legislation. The FMA aims to assist firms in talking to the right people in Government, explained Liam. He added that New Zealand’s innovative culture should allow for genuine collaboration and regulators shouldn’t and can’t be the sole decision makers.
While current legislation doesn’t allow for digital advice, as technology advances a law change is required, but it will take time to introduce new legislation. While the FMA has some exemption powers, they are currently consulting on whether digital advice could be included. Key points for consideration include the integrity of the advice, limitations on the types of advice given, screening processes, monitoring feedback and increased engagement.
In Christchurch on 4th July, FinTechNZ introduced Adam Lyness speaking on behalf of Cryptopia, who is working to realise the goal of everyday purchases with cryptocurrency. He discussed the importance of ongoing engagement with the Government, whilst being open and transparent so banks and companies can see the benefit of using cryptocurrency.
Our third event in our series, was held in Auckland on 17th July, where we heard from OMNIMax owner Jonathan Taylor, followed by a presentation by FMA’s Bronwyn Bayne and Derek Grantham to further discuss the evolving regulatory landscape. Bronwyn reiterated the FMA’s stance that FinTech businesses should engage early and expect a long term professional relationship. The FMA is keen to engage with the community to understand FinTech market developments. She emphasised the FMA’s role in facilitating innovation while considering risk to the rest of the economy. Regulation can genuinely create opportunities, she said. Due to New Zealand’s younger regulatory environment, it is better positioned than many others to be nimble and react to changes. To provide the best advice the FMA will require a certain level of detail about your product or service including target market, identified barriers, customer payments, partners, risks, mitigation plans, indicative time frames and launch dates. Derek Grantham discussed robo-advice and the balancing act of providing consumer protection while avoiding barriers for innovation.
In Auckland, we introduced a panel of banking members, Richard Copus (ANZ), Tim Wixon (BNZ), Peter Fletcher-Dobson (Kiwibank) and Will Cooper (Westpac) to discuss the banking world’s engagement with FinTech. Each of the banks are eager to engage with FinTech startups; Westpac has a Ventures Team, Kiwibank has the FinTech Accelerator Programme, ANZ are working on an engagement strategy and BNZ has FinTech high on their business agenda. It was agreed that innovation can be a challenge given banks are large corporate organisations with a 200-year history. However, the FinTech ecosystem is putting pressure on the current banking model. Guidance from the banking panel for FinTech businesses includes; be mindful of lengthy time frames when engaging with banks, clearly articulate your ideas, have a governance structure, understand risk management, consider systems integration, banks need to understand the purpose of transactions (anti-money laundering is important), find an internal advocate and be clear about what you are asking the banks for (equity, procurement, access to customers?).
Thank you for joining the FinTechNZ team and fellow members at our quarterly networking and engagement event series. A special thanks to our hosts BizDojo; CDC and PWC. The event series was an excellent opportunity to gain insights, increase knowledge and create connections. Stay tuned for details of our next FinTechNZ Connect Event series, coming in September and October.
The New Zealand Financial Innovation and Technology Association (FinTechNZ) brings together a diverse range of innovators from across the financial services industry to actively shape and drive the FinTech revolution. FinTechNZ was established to provide a collaborative voice, create connections, increase knowledge, support international growth and influence policy. Learn more and be involved here.