The Turnbull government is counting on Australian fintech lenders and mandatory comprehensive credit reporting to revolutionise business lending.
Fintech start-ups have increased by more than 5 times as of July from lower start-ups in 2014. Australia fintech start-ups went from fewer than 100 to 579 in that time frame, according to Scott Morrison, Treasurer. He noted that in August of 2017 alone, fintech lenders administered 12 million dollars for over 1,000 loans.
Mr. Morrison pointed out that the Sydney-based SME lender Prospa with a loan book worth of 450 million dollars is evidence that the fintech industry is healthy and successful at the FinTech Australia Collab/Collide Summit, held in Melbourne on Thursday, the 2nd of November. This the company has 12,000 customers and continues to grow “at warp speed”, according to the Treasurer.
The massive changes being made by the federal government to the Australian banking culture are intended to encourage competition and help new entrants, as well as create a regulatory sector for fintech development and to change legislation that will allow more of these operators to call themselves a ‘bank’.
The ideal of ‘open banking’ is being driven by the Productivity Commission and should provide customers more control over their banking data, feeding into the Turnbull government’s recent disclosure of (CRR) mandatory comprehensive credit reporting, which started 1 July 2018.
This concept will change the game for lenders and consumers alike, leading to heftier competition in the lending sector, which will naturally lead to improved access to finance for Australian small businesses and households, according to Mr. Morrison.
Morrison on to say, “This will not only grow businesses and our economy, but can also change our daily lives.”
The Treasurer is convinced that the new administration will provide lenders with a better level of transparency of borrower’s actual credit position, leading to better deals on business-related loans.
Treasurer Morrison said, “Small business owners can spend less on financing costs and more on investment in business growth.”
This could actually revolutionise lending across the country and improve lending and the economy.
First Choice Mortgage Brokers are a Sydney Mortgage Broker operating under the Australian Credit Licence Number: 382370