The Australian fintech ecosystem continues to evolve rapidly in 2024, driven by the need to adapt to emerging technologies, enhance consumer protection, and foster innovation. Several regulatory changes have been introduced or are on the horizon, influencing how fintech companies operate. Here are the top 10 fintech regulatory updates in Australia for 2024.
1. New Payment Licensing Framework
The Australian government has launched a major overhaul of the payment system in 2024. A key part of this reform is the introduction of a new payment licensing framework, which aims to modernize how payment service providers (PSPs) are regulated. This includes enhancing the regulatory oversight of fintech companies offering digital wallets and buy-now-pay-later (BNPL) services, ensuring a more standardized licensing regime for emerging payment technologies
Gilbert + TobinNorton Rose Fulbright | Global law firm.
2. Scam Prevention and Fraud Reduction Measures
A significant focus in 2024 has been the introduction of enhanced scam prevention regulations. Financial institutions and fintech companies are now required to implement stronger anti-fraud measures. These changes follow the government's strategic initiatives aimed at reducing the rising number of scams targeting consumers. The goal is to protect digital financial transactions and improve trust in fintech platforms
Gilbert + TobinNorton Rose Fulbright | Global law firm.
3. Regulation of Digital Asset Platforms
Australia is moving forward with new regulations for digital asset platforms. A proposed bill will require platforms offering digital asset services, such as cryptocurrency exchanges and custodians, to meet similar regulatory standards as traditional financial institutions. This includes obtaining Australian Financial Services Licenses (AFSL) and adhering to stricter consumer protection rules. This reform aims to strengthen consumer safeguards and ensure that digital asset markets are transparent and secure
Gilbert + TobinNorton Rose Fulbright | Global law firm.
4. Crypto Asset Licensing and Custody Requirements
Another critical regulatory shift is the impending crypto asset licensing regime. The Australian Treasury has initiated consultations on a new framework that will impose licensing and custody requirements for digital asset service providers. This reform, expected to roll out fully by the end of 2024, seeks to improve the accountability and security of crypto services by ensuring that companies offering these products meet strict compliance standards
Gilbert + TobinFinTech Australia.
5. Consumer Data Right (CDR) Expansion
The Consumer Data Right (CDR), which allows consumers to securely share their financial data with accredited third parties, is expanding to include more sectors in 2024. Initially focused on banking, this expansion will cover energy and telecommunications. Fintech companies will need to adapt to these changes by implementing more robust data-sharing mechanisms, further integrating the CDR into their services
6. Digital ID and Identity Verification Reforms
Australia is advancing its Digital Identity (ID) reforms in 2024. The government is working on streamlining digital identity verification processes to support fintechs in securely identifying users. This will facilitate smoother KYC (Know Your Customer) procedures and enable consumers to access financial services more easily. The expansion of the Digital ID framework is expected to enhance trust in online transactions and reduce identity fraud
Gilbert + TobinFinTech Australia.
7. AML/CTF Reforms for Remittance Providers
Reforms targeting anti-money laundering (AML) and counter-terrorism financing (CTF) have been updated to include stricter obligations for remittance service providers. These reforms, part of Australia’s broader AML/CTF regulatory update in 2024, aim to improve the tracking of digital remittances and ensure that fintech platforms remain compliant with international financial crime prevention standards
8. Central Bank Digital Currency (CBDC) Exploration
Australia is actively exploring the introduction of a Central Bank Digital Currency (CBDC). The Reserve Bank of Australia (RBA) has been conducting pilot programs to evaluate the potential benefits of a CBDC in the Australian financial system. These pilot projects will influence the country’s approach to digital currencies, potentially providing new opportunities for fintech companies involved in blockchain and crypto technologies
Gilbert + TobinFinTech Australia.
9. Updating the Payments Systems (Regulation) Act
Australia’s Payments Systems (Regulation) Act is undergoing modernization to reflect technological advancements in payment systems. This includes changes that will better regulate digital payment platforms, such as real-time payments and digital wallet services. The Act’s reform seeks to improve the efficiency and security of digital transactions, giving fintech companies clearer guidelines to follow
Gilbert + TobinNorton Rose Fulbright | Global law firm.
10. AI and Machine Learning Governance
In response to the growing use of artificial intelligence (AI) and machine learning in financial services, new governance frameworks are being established to regulate how these technologies are applied in fintech. These guidelines will help fintech companies align with ethical and transparent AI practices, ensuring that consumer rights are protected while encouraging innovation in automated financial services
