The Federal Government has passed laws to extend the fintech regulatory sandbox.

The Treasury Laws Amendment (2018 Measures No. 2) Bill 2019, passed this week, will give fintechs a 24-month window to test products without having to obtain a financial services or credit licence from the Australian Securities and Investments Commission (ASIC).

The measures are aimed at providing an environment that helps fintechs get to market without having being bogged down in the regulatory minefield.

Senator Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology, says there will still be strong consumer protections, such as limits on the products and services that can be tested, and limits on financial exposures of retail clients.

The existing ASIC sandbox had a 12-month window and was only for startups working on specific products or services.

The scheme has now been expanded to include businesses working on financial advice, issuing of consumer credit contracts and facilitating crowdsourced funding.

“A strong fintech ecosystem means a more competitive financial market landscape — one that is consumer-driven, efficient and among the world’s leaders,” Senator Hume said in the statement.

In a group submission on the legislation’s draft form, consumer groups Choice, Financial Rights Legal Centre and the Consumer Action Law Centre said a bigger sandbox could allow for unlicensed financial advice on vital matters like superannuation, insurance and long-term investments.

“These services are too complex and too important to the long-term well-being of consumers to be offered without the adequate protections that the sandbox removes,” they said.

Danielle Szetho, CEO of FinTech Australia, says fintech startups are often designed to provide better protections for consumers.

“Many fintechs I see are oriented completely around what the consumer is thinking, and some are turning around what it means to be customer-centric,” she told reporters.

“They have thinking about the consumer completely at the core.

“It’s about maintaining the long-term integrity of the industry, and we agree there needs to be good safeguards against dodgy operators in place.

“As a mature, diverse and internationally connected ecosystem, Australia is an attractive destination for fintech investment globally. The Morrison government is seizing this valuable opportunity to grow the sector even further.”