{"id":3099,"date":"2016-03-07T03:32:29","date_gmt":"2016-03-07T03:32:29","guid":{"rendered":"https:\/\/raizinvest.com.au\/investors\/our-letter-to-the-hon-malcolm-turnbull-from\/"},"modified":"2024-04-04T17:09:50","modified_gmt":"2024-04-04T17:09:50","slug":"our-letter-to-the-hon-malcolm-turnbull-from","status":"publish","type":"post","link":"https:\/\/raizinvest.com.au\/investors\/blog\/our-letter-to-the-hon-malcolm-turnbull-from\/","title":{"rendered":"Our Letter to The Hon. Malcolm Turnbull (from Raiz, previously Acorns)"},"content":{"rendered":"

4 March 2016<\/p>\n

The Hon. Malcolm Turnbull,
\nMP<\/p>\n

Prime Minister<\/p>\n

Parliament House<\/p>\n

Canberra ACT 2600<\/p>\n

Dear
\nPrime Minister,<\/p>\n

Establishment of the FinTech Advisory
\nGroup<\/b><\/p>\n

I write to congratulate the Australian
\nGovernment on its decision to establish a FinTech Advisory Group, and I
\ncontinue to welcome the increased focus on encouraging innovation in Australia,
\nparticularly in the FinTech sector. \u00a0As
\nan active member of this community, and having recently launched our Acorns
\nproduct in Australia, I have experienced first-hand the dramatic surge in
\nactivity in this industry, and I look forward to its continued growth.<\/p>\n

That said, I strongly believe there is
\nmajor issue that, if left unresolved, will prevent FinTech innovation and
\ncompetition achieving its full potential in Australia.<\/p>\n

It is my contention there is lack of
\nunderstanding and confusion in the public mind that they are no longer
\nprotected by Australian regulations, and that the liability protections under
\nthe terms and conditions on which they conduct their internet banking do not
\napply when they deal with FinTech start-ups such as ourselves. \u00a0This
\nis not the case.<\/b><\/p>\n

I am concerned and disappointed to see
\nbanks and other financial institutions seek to discourage users from engaging
\nwith FinTech by exacerbating the confusion and fear in this area.<\/p>\n

It should not fall upon the small start-ups
\nto educate investors about their rights and obligations vis-\u00e0-vis their banks,
\nand it should not fall upon small start-ups to monitor the information that is
\nbeing disseminated to consumers by bank employees.<\/p>\n

To explain this more specifically, Acorns
\nis a micro investing \/ micro savings smartphone application. When a user signs up
\nto the app, they provide Acorns (and its service provider Yodlee) with their
\nbank account log-on details and password. There has been significant media
\ncommentary (both social and mainstream),
\nincluding comments made by persons who purport to be bank employees, that by
\ndoing this, the user becomes liable for any<\/b>
\nunauthorised transactions. As you would expect, these type of comments are
\ncreating great consternation and discouraging users from engaging with FinTech
\ncompanies, such as Acorns.<\/p>\n

However, this commentary, and the stance
\ntaken by the purported bank employees, is wrong. It is clear under the ePayments Code<\/i> (Code<\/b>) (which all major Australian banks have subscribed to) that
\nthe user will not be liable for any unauthorised transactions because:<\/p>\n

(a)
\nthe user expressly appoints
\nAcorns and Yodlee to collect information on the user\u2019s behalf only (i.e. Acorns
\nand Yodlee have \u201cread only\u201d access to the user\u2019s bank account. They cannot effect transactions<\/b>); and<\/p>\n

(b)
\nAcorns and Yodlee protect the
\ndata using encryption and bank standard security measures to keep it safe.<\/p>\n

Consequently, the user does not<\/b> breach the requirements of the
\nCode, nor the terms and conditions of their bank contract and does not<\/b> become liable for any and all<\/b> unauthorised transactions.<\/p>\n

I would urge the FinTech Advisory Group and
\nASIC to consider this issue, given their mandate to encourage FinTech
\ninnovation, while reducing barriers and ensuring that these barriers are not
\n(mis)used by incumbent players to discourage competition. Unless this issue is
\nresolved, I believe it will stunt the development of FinTech, an integral part
\nof the Innovation strategy recently articulated by you.<\/p>\n

Please be aware that we will release a copy
\nof this letter to our users (of which there are over 50,000) and to the media
\nat large.<\/p>\n

Should you wish to discuss this matter
\nfurther or if you have any questions or comments, please contact me on 1300 954
\n678.<\/p>\n

Yours faithfully<\/p>\n

\"image\"<\/figure>\n

George
\nLucas<\/p>\n

Managing Director<\/p>\n

Acorns Grow Australia
\nLimited<\/p>\n","protected":false},"excerpt":{"rendered":"

4 March 2016 The Hon. Malcolm Turnbull, MP Prime Minister Parliament House Canberra ACT 2600 Dear Prime Minister, Establishment of the FinTech Advisory Group I write to congratulate the Australian Government on its decision to establish a FinTech Advisory Group, and I continue to welcome the increased focus on encouraging innovation in Australia, particularly in […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[1],"tags":[],"yst_prominent_words":[]}