Australia’s federal administration has launched a Financial Innovation Strategy designed to modernise the country’s financial system, lift productivity and strengthen the regulatory environment in which new financial products and services are developed.
The strategy, published today, sets out plans to establish a Financial Innovation Committee that will sit alongside existing coordination bodies and support a joined-up approach to financial innovation across government, regulators and industry.
Alongside this, the government is reworking its Enhanced Regulatory Sandbox framework, following a review that found the current model has fallen short of the level of use and flexibility that industry needs.
The revised sandbox framework is intended to replace the existing structure with a more adaptable model, one that strengthens the route from early-stage testing through to full market adoption.
Under the existing arrangement, the sandbox has allowed firms to trial innovative products and services under appropriate safeguards, while giving regulators direct insight into emerging technologies, the obstacles firms face and where future policy may be needed. Regulators are now expected to weigh up targeted sandboxes for priority areas including AI-enabled financial services and digital financial market infrastructure.
The government has framed the strategy as addressing a gap it sees in the current system: that innovation is about more than simply adopting new technology, and instead depends on new products, services, business models and ways of working that deliver better outcomes for consumers, businesses and the wider economy. Achieving this, it says, requires clear strategic direction and ongoing coordination between government, regulators and industry participants.
The government has also pointed to the strength of Australia’s existing financial system as a foundation for the new strategy, arguing that the plan will help the sector become more innovative, more productive and more competitive on a global scale, while preserving the trust that currently underpins it.
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
