Read on Twitter
Senate Committee interim report on fintech extols virtues of self regulation in ‘innovative’ financial services. There are a number of issues with this recommendation. THREAD
Many harmful financial services have marketed themselves as ‘innovative’, but are just ripping people off. Payday lending is just one example (‘Just Nimble it’). These businesses cannot be trusted to regulate themselves.
The report referred to buy now pay later services as one example of ‘innovation’ in the sector. I disagree. Simply putting an existing product (credit) on an app doesn’t make it innovative or good for people’s financial wellbeing.
Most innovation in the financial services sector has been focussed on exploiting loopholes in existing laws or simply having a savvy marketing strategy that makes a product look new or different. BNPL is one example, but there are many others
The Financial Services Royal Commission described the problems with self regulation at length, including the lack of appropriate enforcement mechanisms. These lessons cannot be forgotten #bankingrc
We want innovative companies that are willing to comply with consumer protection laws and enhance people’s financial wellbeing in Aus. Having strong laws increases consumer confidence and levels the playing field for industry. Self regulation alone is ineffective. END
You can read the interim report here: https://www.aph.gov.au/-/media/Committees/fintech_cttee/report.pdf?la=en&hash=3CC27C2FBD5050FDAA739F6541FD69F5BB2F48CC
