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How FinTech is Shaping Investment and Asset Management How FinTech is Shaping Investment and Asset Management

The increased interest in fintech management is also contributed to by the high amount of fees charged by active managers who nevertheless are no match for robo-advisors.

Australia’s funds management industry is the largest in the Asian regionAustralia’s funds management industry is the largest in the Asian region

Australia’s funds management industry (also referred to as “managed funds” or “investment funds”) is the largest in the Asia-Pacific region and the sixth largest in the world, according to the survey produced by Washington-based Investment Company Institute.

Robots, Artificial Intelligence to make many fund managers obsolete: expertRobots, Artificial Intelligence to make many fund managers obsolete: expert

Google is likely to harness its massive financial and data firepower to emerge as a funds management powerhouse, a global finance guru has warned, as artificial intelligence and robots make obsolete many of the world’s highly-paid fund managers.

New credit card reforms proposed

June 14, 2016


Money Magazine, Zac Gillam, Consumer Action Law Centre

In the dying hours of the 44th parliament, the federal treasury released a discussion paper titled “Credit cards: improving consumer outcomes and enhancing competition”. The paper notes that for a particular subset of consumers, credit cards “may impose a substantial burden on financial wellbeing”.

We couldn’t agree more. Australians hold $32 billion in credit card debt at an average of around $4300 a card (paying over $700 a year in interest). At Consumer Action, we often deal with consumers with credit card debts of more than $10,000, $50,000 and sometimes $100,000. The “subset” of struggling consumers is substantial.

To address this, the paper proposes two reform phases. “Phase 1” tightens responsible lending rules and broadens the prohibition on unsolicited offers. It prohibits backdating of interest charges, and charging interest on the paid portion of balances. Providers would be required to provide online tools for card cancellations and credit limit reductions.

“Phase 2” (which will be pursued only after consumer testing) contains reforms to stimulate competition and address under-repayment. Finally, the paper notes two options “not preferred at this time”: specifically, a requirement for issuers to make switching easier; and to increase minimum repayment amounts.

Our verdict? The Phase 1 reforms are excellent and long overdue. Constraining unsolicited offers is great, and lenders will finally be required to assess applicants’ capacity to repay the entire credit limit over a “reasonable period”. We think this period should be three years. Any longer and the long-term debt sentence of credit cards becomes entrenched.

The Phase 2 reforms are also good, as is the proposal to test their validity through “laboratory experiments [and] in-field experiments”. Too often policy is made without understanding its real-world impact. Let’s hope the banks co-operate with robust testing.

Finally, the “not preferred at this time” reforms are powerful. It is extremely disappointing that they’ve been sidelined. Submissions are due on June 17, about two weeks before the election.

The paper has crept into the caretaker period with a “softly, softly” approach. However, if implemented, the impact on the most vulnerable credit card debtors would be substantial.

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