Legal Checklist Before Providing a Financial Service in Australia

If you’re building a fintech product, launching a “money” feature inside your app, or offering anything that looks like advice, payments, investing or credit, it’s easy to focus on product and traction first.

But before you launch (or scale) in Australia, there are some key legal questions to answer if your product involves financial services. Getting them wrong can mean delays, forced changes to your offering, reputational damage, and (in some cases) serious penalties.

The tricky part is that “financial services” (and “financial products”) are defined broadly under Australian law. You might not think you’re doing anything regulated - until you look closely at what your product actually does for customers, how it’s marketed, and who is really providing the regulated component.

Below is a practical, startup-friendly checklist to help you identify what you may need to do before providing a financial service in Australia (and what documents and compliance systems you should have ready from day one).

1. Are You Actually “Providing A Financial Service”?

This is the first (and biggest) threshold question. In Australia, financial services regulation can apply even when you’re not a “traditional” finance business.

At a high level, businesses can be caught where they provide a financial service in relation to a financial product (for example, by giving financial product advice, dealing or arranging deals, issuing certain products, or operating certain schemes). What counts as a “financial product” can include things like interests in managed investment schemes, securities, derivatives, superannuation, insurance, and some payment and facility-style products - but the definitions and exemptions are technical and very fact-specific.

To work out what you need to do before providing a financial service, start by mapping your customer journey:

• What do you say customers can do with your product?
• What happens to their money (if any)?
• Are you recommending, arranging or dealing in financial products?
• Are you holding funds, moving funds, or instructing others to move funds?
• Are you charging fees based on investment performance, interest, or transactions?

Common Startup Activities That Can Trigger Financial Services Rules

Here are examples of activities that can raise financial services or related regulatory issues (depending on the details):

• Giving “advice” (even if you call it education) about investing, superannuation, insurance, or specific products
• Operating a platform where users buy/sell or invest in assets, including fractional interests
• Arranging for customers to access loans, credit, or BNPL-style products
• Providing payment features (wallets, stored value, remittance, payment facilitation)
• Issuing a product (or being involved in issuing) like interests in a fund or other investment-like structure

Even if you’re “just the tech”, regulators often look at substance over labels. So it’s worth pressure-testing your product claims, website copy, onboarding flows and FAQs early - not after you’ve launched.

2. Licensing: AFSL, Credit Licensing, And Other Permission Pathways

For many businesses, the core reason you need a checklist is this: you may need a licence (or to operate under someone else’s licence) before you can lawfully provide your product in-market.

There are a few common pathways startups use, depending on what you do.

Australian Financial Services Licence (AFSL)

An AFSL is commonly required if you provide certain financial services relating to financial products (for example, providing financial product advice, dealing in financial products, or operating a managed investment scheme).

For startups, the key practical point is: AFSL compliance is not just a form. It’s typically a combination of:

• having the right people and competencies in place
• having compliance systems, policies and processes
• disclosure documents and record-keeping
• ongoing reporting and conduct requirements

Depending on your model, you may also need to think about what customer disclosures apply (for example, an FSG and, where relevant, a PDS), whether a “general advice” warning is required, and what complaints pathway customers must have access to (including whether AFCA membership applies). These requirements can vary based on the service, the product type, and whether you’re dealing with retail or wholesale clients.

If you’re early-stage, you’ll often need to weigh up whether to apply for your own AFSL now, or partner with an AFSL holder while you validate your product.

Australian Credit Licence (ACL) (Consumer Credit)

If your product touches consumer credit - for example, you’re providing credit, arranging credit, acting as an intermediary, or offering credit-related advice - you may fall within the consumer credit licensing regime.

This is a common surprise for startups building “affordable finance” tools, BNPL-style features, or loan comparison/lead-gen models. The difference between “referring” a customer and “suggesting” a particular credit contract can matter.

Depending on what you do and who your customers are, additional obligations can also apply in the credit space (for example, disclosure documents like a credit guide, and complaints handling requirements that can include AFCA membership). The details are very model-specific.

Relying On An Authorised Representative / Referral Model

Some startups launch by structuring their role as a referral or technology provider, while regulated activity is carried out by a licensed partner.

This can work well, but the legal risk is in the details. Regulators will look at:

• what you say to customers (marketing claims and in-app prompts)
• who is actually providing the service (and whether that’s clear to the customer)
• how fees are charged and described
• whether your “referral” is really a form of advice or arranging

In other words, a partner arrangement isn’t a “set and forget” shortcut - it’s a structure you need to document properly and operate carefully.

3. Your Business Setup: Entity Structure, Governance, And Risk Containment

Because financial services is a higher-risk area, it’s worth getting your foundations right early. Even if you’re not yet sure whether you need a licence, solid setup helps you move faster once you confirm your regulatory position.

Choose The Right Entity Structure

Many founders start as a sole trader to keep things simple, but fintech and finance-adjacent models often move quickly into a company structure because:

• it’s easier to bring on co-founders, employees and investors
• it can provide better separation between business liabilities and personal assets
• it tends to fit regulated and enterprise partnerships more cleanly

If you’re setting up (or restructuring), it helps to work through a legal checklist so you don’t miss the basics that investors and partners will ask about later.

Document Decision-Making Between Founders

If there’s more than one founder, you’ll usually want to document the rules of the relationship early. This becomes even more important when you’re building a regulated product, because disagreements can derail licensing, fundraising and compliance.

A tailored Shareholders Agreement can cover things like ownership, vesting, decision-making, fundraising, exits and what happens if a founder leaves.

Make Sure Your Core Contracts Are Actually Enforceable

Startups move fast - but regulators and customers don’t care if your terms were “rushed”. If your onboarding relies on clickwrap terms, pricing pages, or emailed proposals, you need to be confident a contract is actually formed.

It’s worth understanding what makes a contract legally binding so your user terms, partner agreements and fee arrangements stand up when there’s a dispute.

4. Compliance Beyond Licensing: Privacy, AML/CTF, Marketing, And Consumer Law

Licensing is only part of the picture. For many startups, the most immediate compliance work is actually in the “day to day” rules that apply even if you’re not licensed (or while you’re operating under a partner’s licence).

Privacy And Data Handling (Especially With Financial Data)

Most financial products collect sensitive information - identity details, income data, bank account information, transaction history, behavioural analytics, and sometimes documents like payslips.

If you collect personal information, you will generally need a clear, fit-for-purpose Privacy Policy that reflects what you actually do (not just a template that doesn’t match your product).

In practice, your privacy compliance should also cover:

• what you collect and why
• how you store it and who can access it
• cross-border disclosures (if you use overseas hosting or providers)
• how users can access or correct information
• data breach response planning

AUSTRAC And AML/CTF (If You Touch Payments Or Value Transfer)

If your startup is involved in moving money, remittance, digital wallets, or other value transfer features, you may have obligations under Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) framework.

Importantly, AML/CTF obligations generally turn on whether you provide a “designated service” under the AML/CTF laws (and the scope can differ depending on the exact product flow and who is legally providing the service). If it applies, you may need to enrol and/or register with AUSTRAC, run KYC processes, keep records, submit certain reports, and maintain an AML/CTF program.

This is a technical area, and it’s very product-specific. The key takeaway is: if your product involves moving or holding value, build time into your roadmap to confirm whether AML/CTF applies and what you need operationally.

Australian Consumer Law (ACL) And Misleading Claims

Many fintech products win customers by promising simplicity, speed, savings, or “better returns”. That’s fine - but you need to be very careful about how you advertise and describe your product.

Under the Australian Consumer Law (ACL), you must not engage in misleading or deceptive conduct. The risk areas for startups often include:

• comparison claims (“cheapest”, “best”, “guaranteed savings”)
• “no fees” claims that don’t reflect all charges
• testimonials and case studies that imply typical outcomes
• using words like “independent” or “personalised” when it’s not

Marketing compliance is one of those issues that’s much easier to design into your website and product early, rather than rewrite later under pressure.

Terms For Customers And How You Handle Complaints

Even if you’re not yet required to provide formal disclosure documents, you should still set expectations clearly with customers. This means having user-facing terms that explain:

• what your service does (and doesn’t do)
• fees and payment terms
• limits, eligibility, and service availability
• how you handle errors, outages, reversals or disputes
• complaints processes and response times

Depending on your model, you may also need a formal internal dispute resolution process (and, in some cases, access to an external dispute resolution scheme like AFCA). Even where it’s not strictly required, having a clear complaints pathway is good risk management.

If you sell to businesses (for example, a SaaS tool for finance teams), you may also want Terms of Trade that align with your invoicing, payment timelines, and liability position.

5. Product And Commercial Legal Documents You’ll Likely Need

A strong legal setup isn’t just about “compliance” - it’s also about protecting your startup so you can scale confidently.

Here are common legal documents to consider before providing a financial service (or as you prepare to launch and grow). Not every business will need all of these, but most will need a combination.

• Customer Terms and Conditions: Sets the rules for using your service, including fees, limits, disclaimers and dispute processes.
• Privacy Policy: Explains how you collect, use and disclose personal information (particularly important where you handle financial data).
• Website Terms and Conditions: Covers how users can use your website and content, including IP and acceptable use.
• Partner / Referral Agreement: If you work with a licensed provider, this should set out responsibilities, branding rules, lead handling, fees, and compliance boundaries.
• Contractor / Employment Agreements: If you hire staff or contractors to build the product, you’ll want clear terms on IP ownership, confidentiality, and obligations.
• Non-Disclosure Agreement (NDA): Useful when you’re sharing sensitive roadmap or technical details with suppliers, investors or strategic partners.
• Brand Protection Documents: Your name, logo and product branding are valuable - especially once you start acquiring customers.

Protect Your Brand Early

Fintech is crowded, and confusingly similar names are common. Protecting your brand early can reduce the risk of rebrands and disputes later.

If you’re investing in a brand, registering a trade mark is often the most practical way to protect your business name or logo.

If You Take Security Or Register Interests Over Assets

Some finance businesses take security (for example, over business assets), or may need to understand how security interests work in practice.

If that’s part of your model, it helps to understand a General Security Agreement and how it fits into enforcement and risk management.

6. Key Takeaways

• Before providing a financial service in Australia, confirm whether your product is regulated based on what it actually does (and how it’s presented) - not just the labels you use.
• Many finance-related business models require an AFSL, an Australian Credit Licence, or a carefully structured partner arrangement, and these pathways usually come with ongoing systems, conduct and disclosure requirements.
• Your business setup matters: the right structure, founder arrangements and enforceable contracts can make licensing, fundraising and partnerships much smoother.
• Compliance is broader than licensing - privacy, marketing claims, consumer law, complaints handling, and (sometimes) AML/CTF obligations may apply early (with AML/CTF often turning on whether you provide a “designated service”).
• Having the right legal documents in place (customer terms, privacy, partner agreements and IP protection) helps you manage risk while you scale.

If you’d like a consultation on what you need to do before providing a financial service in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.