Last year, Australians lost more than $98 million from digital crimes such as fraud and hacking according to the Australian Cyber Security Centre. The financial losses are substantial and life-ruining in many cases which is why it’s understandable that the Federal Government is keen to invest in projects that can reduce future occurrences. One of those investments is being made to the tune of $2.3 million in a project led by fintech company Novatti Group (ASX: NOV).
Novatti will lead a project centred around cryptocurrency to develop a platform that can mitigate fraud and money laundering risks. This field is nothing new to Novatti which has a suite of regtech products in this space for fiat currency risk that is utilised by some of Australia’s largest corporations.
Other collaborative partners in the project include RMIT, Swyftx, Hashkloud and Thankq.
The $2.3m grant is part of the Government’s Cooperative Research Centres Projects (CRC-P) Grants program that provides funding to support industry-led research collaborations. To secure a grant, the project must develop a product, service or process that will solve problems for an industry and deliver real outcomes, benefit small business and include education and training activities.
“Concerns over cybersecurity have greatly increased over recent years where it has become the most critical corporate risk,” said Novatti Managing Director, Peter Cook.
“There is a growing need to develop innovative new solutions that can prevent fraud and money laundering in the digital space and with Novatti’s fintech and regtech suite, we are well positioned to address these risks”.
“Through this collaborative project and with the support of Government funding, we are seeking to provide an innovative solution that can mitigate these risks and hence enable digital asset transactions to support long-term growth in Novatti’s financial transactions and payments revenues.”
It comes as no surprise that Novatti is leading such a project, having been proactive in the crypto space for several years already, utilising it to process cross-border transactions as well as launching their 100% fiat-backed stablecoin AUDD in 2022. Through their leadership in the digital payments space and experience developing blockchain products, Novatti was also invited to appoint a representative to the Reserve Bank of Australia’s Digital Payments System Board in 2022.
The project, which will be funded for 3 years under the CRC-P grant, will seek to align crypto transactions with traditional payment options such as credit cards. More specifically, it will allow consumers, merchants, and exchanges to acquire, verify and transfer crypto with trust and scalability while conducting daily business. This will provide a pathway towards wider scale utilisation of crypto for everyday transactions while reducing fraud and money laundering risks.
The Government grant to Novatti and its collaborative partners comes just months after the Optus and Medibank hacks which saw millions of Australians with their personal information leaked. The full financial extent of those crimes is still yet to be determined and could have ongoing consequences and risks for customers whose hacked information could be used with ill-intent by criminals in the future.
In the immediate aftermath of those cybercrimes, Australian Securities and Investments Commission chairman, Joe Longo, declared cybercrime as the number one risk facing corporate Australia.
In FY22, the Australian Cyber Security Centre received more than 76,000 cybercrime reports. The Centre reported a rise in the average cost per cybercrime report to more than $39,000 for small businesses and $88,000 for medium-sized businesses which was, on average, a 14% increase on the previous year.
The Government endorsement of Novatti to lead the cryptocurrency project comes just months after the Melbourne-based fintech successfully incubated the International Bank of Australia which was granted a restricted banking licence in November 2022 with Novatti retaining 91% ownership.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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