Financial technology (fintech) firms looking to do business in Australia will find it easier, thanks to a new agreement between the countries' financial regulators.
The Monetary Authority of Singapore (MAS) and the Australian Securities and Investments Commission (Asic) yesterday signed what is called the Innovation Functions Cooperation Agreement.
This will allow fintech firms in Singapore and Australia to speed up the process of entering each other's markets, including setting up early discussions more quickly and getting advice on required licences.
MAS chief fintech officer Sopnendu Mohanty said in a statement that the agreement would create opportunities for firms to grow and expand in both places.
"MAS is also looking forward to partner Asic in joint innovation projects on the application of key technologies such as digital and mobile payments, blockchain and distributed ledgers, big data, and application programming interfaces," he added.
Asic chairman Greg Medcraft said fintech start-ups have been asking about regulatory requirements in Australia since the regulator set up an innovation hub last year.
He added: "This agreement with the MAS will help break down barriers to entry both here and in Singapore."
With freer movement, this could see more Australian fintech firms moving into an increasingly saturated space where banks are present as well, but industry watchers are all for it.
DBS Bank chief innovation officer Neal Cross said: "We see this as a net advantage as DBS is incredibly active in fintech. It's not a threat but a huge opportunity for us to get new ideas, people and services.
"We already have access but we welcome easier access to a whole new range of fintech companies, and Australia has been very innovative over the years."
Before firms can seek support under the agreement, they have to meet the eligibility criteria of their home regulator.
MAS said: "Once referred by the regulator, and ahead of applying for licence to operate in the new market, a dedicated team or contact person will help them to understand the regulatory framework in the market they wish to join, and how it applies to them."
The two regulators have also agreed to work together on possible innovation projects and share information on emerging market trends and their impact on regulation.
Mr Pranav Seth, OCBC Bank's head of e-business and business transformation, hopes the partnership will help financial institutions and fintech players navigate regulatory issues more effectively.
Ms Janet Young, UOB head of group channels and digitalisation, said sophisticated investors looking for alternative investments and corporates looking to partner innovative young companies to expand their capabilities will also benefit from the larger ecosystem.
Mr Getty Goh, co-founder of CoAssets, a home-grown real estate crowdfunding platform that is listed in Australia, said the move by the regulators presents a great opportunity for Singapore firms.
"It's perfect for fintech start-ups which want to break into Australia, which is an up-and-coming player in the sector, and is a new and fresh market."
This article was first published on June 17, 2016.
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