4 reasons to join Australia’s booming FinTech industry
London, Singapore, New York – these are the markets people think of when they think FinTech. They are rich in talent, have loads of capital, and are homes to some of the world’s biggest financial institutions.
However, for a tiny nation of 23m, Australia has a strong case to be a world-leading FinTech market. With almost 600 FinTech Startups and growing – more than Hong Kong and possibly even Singapore – Australia’s rapidly maturing FinTech ecosystem is getting noticed, attracting strong investment from international VCs and Banks.
FinTech Australia’s CEO, Danielle Szetho, will talk through the evolution of Australia’s FinTech industry including the Fintech-friendly policy agenda that has helped it thrive. She will also share insights into Australia’s unique FinTech strengths, where the world’s FinTech leaders are focusing for the future, and the stories of Australian startups that are storming the world stage.
- The Australian FinTech industry now represents 10,000 people. 16% of the start-up sector.
- Venture capital increased from $450 million investment in the FinTech sector in 2014 to around $700 million in 2016 and it is still growing. That’s 250% growth at a time when the rest of the world is going backwards by about 50% in terms ofFinTech investment.
- Australia has a very well-regulated FinTech environment. Forward thinking and very well regarded internationally. There is also a strong trend towards regulatory unification across the world.
- Having such a regulated sector inevitably means that the cost for compliance is high. Many of these costs are manual processes that businesses are now using data technology to automate.
- Australia has many other industries with similar compliance hurdles such as the medical and agricultural sectors. Australia is becoming increasingly well known for looking at how to leverage the intersections betweenFinTech and other industries.
- Blockchain companies are starting to focus on using FinTech applications for international remittances and trade finance and settlements.
- Australian organisations are exploring the core capabilities we have across multiple industry verticals and putting them together to develop specialised niche applications which can also be sold internationally.
“There is a fine line between supporting innovation in this sector without hamstringing it or overregulating it so that you’re actually hampering its growth and being able to protect the consumers that we serve.”
What should you consider when looking for new investment opportunities?
If you are looking for new investment opportunities or for business development opportunities, you might want to consider these facts and figures:
- The FinTech industry now represents 10,000 people or 16% of start-up sector in Australia.
- Venture capital investment in the Australian FinTech sector increased from $450 million in 2014 to around $700 million in 2016 and it’s still growing.
- Australia has overtaken Japan to become the second largest alternative finance sector in the Asia-Pacific region, second only to China (which has around 80% of the world’s alternative finance sector).
What are the 4 key features of the booming FinTech industry?
You might be scratching your head wondering what intersections have to do with finance, but the term does seem to fit nicely.
The first intersection is geographical. Australia is on the doorstep of Asia, making it an ideal place for businesses from both the east and west to establish offices. Our society is full of people from many diverse backgrounds, so we have intersections of culture and ways of thinking. Then, as finance is primarily a service industry, it intersects with many other industries. As a result, the innovations pioneered in the Australian FinTech industry have been fueling growth and technological development in other industries such as the education, legal, health, and insurance sectors.
2. Effective regulations
The financial services industry is the largest contributor to Australia’s GDP (10%), so it makes sense that there is a good balance of government and market regulation, especially in areas like compliance. Therefore, there is less risk in investing here than in other less-regulated markets.
3. Disruption aplenty
Technology is rapidly changing how financial services engage with consumers. There is a good chance you’re already using personal budget management apps like Money Brilliant and Pocketbook. You’ve probably got apps for your bank, health insurer, and utility providers on your smartphone, too. Where would you be without any of those these days?
Personal finance providers in the open banking space are also making a big difference for all those struggling to get a loan from one of the major banks, such as freelancers and start-ups. Now they have providers willing to listen and to back them.
4. Endless opportunities
The opportunities emerging from the FinTech sector go way beyond smartphone applications and lending platforms, though. Amazon’s Alexa devices already allow us to go voice shopping from home and to pay for things via their app. Domino’s Pizza allows their customers to split the bill easily using the PayPal Bill Share function within the Domino’s app. Transaction services are wide open for new technologies like these to tap into. Blockchain technologies show great potential in areas like international remittances and trade.
Then there are all the technologies we are yet to develop for functions we can’t even conceive we’ll need in the years to come.
In a nutshell, FinTech is an area that will only continue to grow for the foreseeable future and Australia is in an ideal position to lead the way.
More about Danielle
Danielle Szetho is the CEO of FinTech Australia, the national FinTech industry association. She is dedicated to building a supportive and collaborative FinTech policy platform that will realise Australia’s ambitions of being a world-leading market for FinTech innovation and investment.
Driven by her organisation’s vision to foster an ecosystem of supportive partners and networks so Fintech companies can thrive and grow, she confesses that meeting and working with bright minds is the best part of her role!
Danielle joined FinTech Australia from Fairfax Media where she was Industry Head, Banking and Finance. Prior to this, Danielle held management roles at leading Media brands such as Fairfax, News Ltd and Fox Sports. Danielle holds an MBA (Executive) and a Bachelor of Digital Media from UNSW.
During her career she has cultivated a diverse set of skills from leadership roles in functions such as Strategy/Transformation, Business Development, Product Management, Data Analytics, Advertising/Marketing and Design/UX and it is this unique skill set that has led to the phenomenal success seen at FinTech Australia since its inception in 2016.
Danielle is a member of the ASIC Digital Finance Advisory Committee and is on the Steering Committee for FinTech Victoria. She is also the FinTech Track curator for SPARK Festival Sydney and is a passionate advocate for Women in FinTech.
Danielle’s Linkedin: Danielle Szetho
Danielle’s Twitter: @mdm_z
FinTech Australia Website: fintechaustralia.org.au
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