Australasia Fintech Regtech Weekend read

How Australia Rose to Become the Third Largest Regtech Hub

Australia has emerged as a major regulatory technology (regtech) hub with 80 firms in the country, sitting only behind the US and the UK in global standings. Despite the pandemic, Australia’s regtechs are feeling positive about the sector’s future growth.

More than 10 per cent of all regtechs are headquartered in Australia, and since 2015, growth in the country has significantly outpaced global growth (15 per cent compound annual growth rate (CAGR) compared to 6 per cent CAGR).

Australia also exerts a regional stronghold, occupying more than 65 per cent of the Asia Pacific regtech market, according to research by The RegTech Association (TRA) in Australia and Boston Consulting Group.

In 2017, the non-profit TRA was established to help mitigate the disconnect between regulators, regtech buyers and sellers. It now has 172 member organisations, with 30 per cent of its members from offshore making it a more global organisation.

This month, the association is hosting its fourth annual eco-system event, the global conference series #ACCELERATERegTech2021, from 17 to 25 March with 750 registrations from 32 countries set to take part.

The Future’s Bright

Despite the ongoing upheaval of the last year – with 67 per cent of regtech companies seeing a negative impact on revenue because of Covid-19 – the future of regtech in Australia has never looked brighter insists Deborah Young, CEO of TRA.

Young has more than 20 years’ experience in financial services advocacy and engagement across technology, venture capital, private equity, financial markets, insurance and superannuation, and is a member of the Australian Federal Government’s FinTech Advisory Committee.

Deborah Young, CEO, The Regtech Association.
Deborah Young, CEO, The Regtech Association.

Australia is the third largest regtech hub in the world after US and UK,” Young tells The Fintech Times. “We have a full suite of solutions that can scale across borders, boundaries and industries. We’ve recently signed memorandum of understandings (MOUs) with The Canadian RegTech Association and the Nordic RegTech Association, allowing us to collaborate more broadly. Australia is a great home for regtech because of our generally well-regarded regulatory system and our adoption of technology (no doubt aided by our geographical isolation).”

As well as establishing the association to support growth of the sector, and help accelerateand encourage regtech adoption, Young also believes the Hayne Royal Commission has played a crucial role in the sector’s growth.

The 2019 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by Commissioner Kenneth Hayne investigated conduct across the Australian financial sector, which was perceived to have fallen ‘below community standards and expectations’.

The year-long inquiry detailed how banks and other financial services companies charged fees for no service — in some instances to dead customers — lied to regulators and cost customers hundreds of millions of dollars through poor advice.

“Founding the association was the first step change – providing programmes and platforms for organisations to have their voice heard, the opportunities explored, and the connections made,” says Young. “The second thing was the Hayne Royal Commission in Australia that highlighted a number of deficiencies in regulation and compliance. Regtech is all about providing tools that help manage regulatory change more efficiently.”

Working Through a Pandemic

According to TRA, the coronavirus pandemic has also ‘aided regtech without a doubt’. It has forced organisations to ‘shine a new light on compliance and efficiency in particular, as workforces migrating from their offices to their living rooms, coupled with the huge increase in data flowing around the system, there needed to be scaled-up protection of that data, and ultimately, the need for real-time reporting became more fundamental.

TRA highlights solutions during the pandemic including digital ID (critical in a pandemic), e-discovery (where’s the regulatory and compliance-based information being stored in our organisation?), financial crime (who’s moving the money, what’s it being used for, accessing the data when the world is at its most vulnerable?), compliance-based training (ensuring your workforce now working from home is remaining compliant to laws and your company policies), and verification platforms (also critical in terms of surfacing key information quickly about individuals, their financial wellness for example).

Young adds: “Australia has continued to fare well during the pandemic. We acted quickly, shut borders, locked down when it was needed, and provided reliable, real-time data to citizens. For many people, the pivot to home working was a move that came easily and naturally – of course aided by technology. During the pandemic, we grew jobs in the regtech sector as small businesses were able to go home, working from there with little interruption.”

“For our association, we went to an online collaboration immediately, within 24 hours of having to cancel our annual conference in March last year, and as a result, significantly grew our global reach. To highlight that point with numbers, our association in the calendar year 2019 had 1000 people attend our programmes. During 2020, this figure increased to 5000 attendees, joining us from 40+ countries around the world.

“Regtech is open for business in Australia, and this is evidenced by the growth of our association from eight to 172 organisations, as well as the mobilisation of government, regulators and regulated entities as they seek to mitigate risks, reduce the burden of compliance and surface more real-time, transparent information for the reporting and building of a more robust regulated system.

“Government have emerged as a significant potential buyer of regtech. Certainly, digital technology and more specifically regtech is going to cement its place in the arsenal of tech weapons required that will underpin a more flexible way of working for everyone. As we reflect on the year-long pandemic right now, I think there is a better grasp on how technology can help enable better outcomes, but in particular that government and regulators have learned that they too can act quickly and decisively – to offer support, relief and guidance – but they must have the tech.”

According to TRA, one topic of conversation at this month’s conference will be the acceleration of regtech among small businesses with the association indicating it plans to ‘do more work in this area’.

To date, regtech has mostly been aligned to financial services and therefore the big business customer base, but as the solutions are getting more creative, the ability to pivot offerings to help small businesses to reduce the burden of regulation and compliance is gaining momentum. For example, in Australia, the workplace industrial relations laws are quite complex and present quite a challenge to manage for small businesses. Regtech can provide relief for this.”

Moving Forward

Towards the end of 2020, The RegTech Association recommended the establishment of new funding pools, including diverting a portion of the fines and penalties levied against regulated industries to support local regtech companies in the development of new solutions, and the improvement of compliance.

TRA has also called for ‘new solutions that will bolster investment and provide companies with the certainty they need to take risks and continue to innovate’.


  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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