The Australia-Singapore Digital Economy Agreement was announced in June as a bid to boost the two countries’ digital economies. Now they’ve begun the talks for real.
The bilateral agreement began the talks for real this weekend, with trade ministers from both countries signing off on the scope of the future collaboration. The cooperation will encompass areas such as FinTech, digital identity, artificial intelligence, e-invoicing, e-payments and digital trade enablement. In other words, areas that are crucial for the RegTech space.
Australia and Singapore will also explore the role data has in the digital economy and cooperate to foster trust, a safe online environment and improve private data protection.
The push towards more data privacy is easy to understand given how financial services have incurred the bulk of the fines from the European General Data Protection since it was enforced.
Simon Birmingham, the Australian minister for trade, tourism and investment, stated that the new push to get the agreement off the launchpad comes as “Southeast Asia’s digital economy is growing rapidly.”
“Connectivity and internet use across the region is increasing with a rising number of businesses and consumers now engaged in cross-border digital commerce,” Birmingham continued.
He added that one in two “Australian businesses are already engaged in the digital economy in some way” and that this number is only set to grow, with the The Australia-Singapore Digital Economy Agreement playing a key role in the expansion of the industry.
“This agreement will ultimately deliver practical improvements that lower the costs and increase the efficiency of doing business,” Birmingham continued.
“This Agreement will expand the scope of our economic engagement and provide new opportunities for businesses and consumers to benefit from the digital economy, modernizing our economic relationship with Singapore. Building on the Australia-Singapore Comprehensive Strategic Partnership, it will also expand on both countries’ commitments under the Singapore-Australia Free Trade Agreement.
“It will provide support to the global trading system at a time of regional economic uncertainty. By developing digital trade rules and standards that build trust and confidence and by deepening cooperation, Australia and Singapore can set ambitious benchmarks for others in the region.”
Chan Chun Sing, Singapore’s minister for trade and industry, added, “Trade has been and continues to be the bedrock of the Singapore economy. The Singapore-Australia Digital Economy Agreement will enhance digital trade opportunities for our companies, with Australia and the broader region.
“With the digital economy of Southeast Asia expected to triple by 2025, this agreement will lay the groundwork for bilateral digital economy cooperation geared towards enabling our companies to tap on this regional growth.
“Through high-standard digital trade rules and pilot initiatives, we will push the frontiers of digital trade and digital connectivity. This agreement will allow us to build on what we have achieved under the Singapore-Australia Free Trade Agreement. It will also add another new dimension to enrich our multi-faceted collaboration under the bilateral Comprehensive Strategic Partnership.
“The agreement will complement both Australia’s and Singapore’s networks of free trade agreements, as well as our efforts as co-convenor of the World Trade Organization Joint Statement Initiative on E-Commerce to develop international digital trade rules.”
Both countries have seen tremendous FinTech growth over the past decade. In Australia’s case, the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has led to lawmakers and regulators moving to fix compliance issues in the sector which had led to serious cases of misconduct in the past.
At the same time, there has been a rise of challenger banks Down Under, with startups like 86 400, Up and Judo viewing for a bigger chunk of the banking market.
Although, the incumbents are fighting back. A few weeks ago, big banks refuted claims made by Judo that traditional players had failed to help fund Australia SMEs. While the Judo described it as a “significant market failure”, the head of the Australian Banking Association disputed the claims that banks would be unwilling to lend to small businesses.
The Australian senate has set up a new committee to look into how the country’s FinTech and RegTech scene can evolve further. This push was welcomed by the market stakeholders RegTech Analyst spoke with recently.
In Singapore, FinTech investment has grown considerably over the past six years. Earlier this year, Singapore even overtook China in terms of how much investment it had attracted. In the first six months of 2019, Singapore raised $1.62bn whereas FinTech cash injections in China dropped to $1.29bn.
Parts of this can be attributed to the massive business opportunities in Singapore, which have been strengthened by a governmental push for it. However, it can also be attributed to Chinese FinTech investment having slowed down. In 2018, the Chinese FinTech industry raised a massive $22.67bn, up from $5.62bn the year before.
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