Building Australia's FinTech Ecosystem: Innovation Hubs for a Competitive Advantage

Abstract

Global interest in regulatory sandboxes as devices to promote innovation and competition in financial systems is extraordinary. Australia has recently expanded the scope of the Australian Securities and Investments Commission’s sandbox in pursuit of these ends. This article argues that while having a sandbox is worthwhile, and certainly sends an important message about regulatory openness and flexibility to the market, the real work of promoting innovation is done by innovation hubs. Hubs are portals that facilitate easy access by fintech companies to regulatory staff, for the purpose of receiving guidance and possibly even dispensations. The analysis of data in a range of jurisdictions, including Australia, supports these conclusions.