Fintechs need ‘competition champion’ in APRA
The prudential regulator has been advised to create a “competition champion” inside the organisation so its traditional priority of financial safety does not block new banking competitors, such as emerging fintech firms.
The 24 official recommendations by former competition regulator and investment banker Graeme Samuel include a view the Australian Prudential Regulation Authority was slow to embrace new entrants and risk-averse to new technologies in the finance industry.
The APRA capability review’s consultations with stakeholders found the regulator prefers technologies it knows and business models that are aligned with its supervisory powers and mandate.
“This could hamper firms’ ability to innovate and adopt technologies that could enhance their competitive position,” Mr Samuel’s review says.
“APRA is seen by the industry as slow in providing guidance on new technologies and not sufficiently cognisant of commercial perspectives.”
APRA and financial firms banks are confronting a rapidly evolving technology landscape, from mobile services, artificial intelligence, open banking, cloud computing and digital currencies.
The criticisms add to pressure on APRA to pay more attention to its impact on competition among banks, insurers and superannuation funds.
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