Media comment on expanded fintech regulatory sandbox consultation

We have today given the following comment in response to several media inquiries seeking our view on the expanded fintech regulatory sandbox (on exhibition until 1 December).  The media inquiries were sparked by a submission by several consumer advocacy groups.


We welcome the broad thrust of the Australian Government’s decision to review and broaden the fintech sandbox.

This includes the decision to extend the sandbox testing period to 24 months and into new areas such as superannuation, life insurance, and domestic and international securities.

However, there are aspects of the government proposal which we are closely examining.

For instance, the expanded proposed scope is still prescriptive and, in some areas, quite restrictive. In particular:

  • The number of allowable retail clients as part of the licensing exemption process has remained at 100 (despite the testing period being extended from 12 to 24 months). This may not be adequate for companies seeking to test low value, high transaction volume products.
  • Similarly, the $10,000 limit for investment products and $40,000 limit for superannuation are extremely restrictive for these product types, and may well make the sandbox of little appeal to both fintech companies and investors.
  • The decision to apply a ‘sum insured’ cap of $85,000 for general retail insurance (rather than a preferred approach of using gross written premium) will effectively exclude home contents, home and buildings, most commercial insurances and travel insurance.
  • Entities that issue financial products as agents for duly authorised product providers are excluded from the sandbox, which would will limit the majority of Australian insurtech businesses from entering the sandbox.

Specifically in regard to the submission by CHOICE and the Consumer Action and Financial Rights Legal Centres, we agree that there needs to a strong focus on ensuring legitimate fintech and insurtech innovations that benefit consumers are being tested in the sandbox.

This is necessary to protect the long-term utility and integrity of the sandbox, and the fintech industry as a whole.

Many fintechs are looking for a sandbox which gives ASIC officials greater flexibility to closely work with fintechs to approve short-term sandbox licences, even if the product may not meet the exact product scope for the sandbox exemption.

Given that Australia’s fintech industry is strongly focussed on providing improved services and outcomes for consumers, we are happy to take part in discussions about how to strengthen protections for consumers alongside the expanded sandbox limits.

This includes working with Treasury and ASIC to find ways to ensure only new businesses, or businesses providing services in a new, improved or more efficient manner, can enter the sandbox.

In conclusion, we want to work with the Australian Government to ensure our regulatory sandbox is the best in the world, while at the same time ensuring ongoing robust protections for retail and wholesale customers and investors.