Where do the opportunities lie in Australia’s 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.

Join the Florence Guild panel with Danielle Szetho – FinTech Australia CEO, Georgia Beattie – StartUp Victoria CEO, and Ben Williamson – Co-Founder dealPad; and find out about the evolution of Australia’s FinTech industry, its unique strengths, where the world’s FinTech leaders are focusing on the future, and the stories of Australian start-ups that are storming the world stage. This discussion shed many insights into the nature of this booming industry, its key participants, and the support industries that are emerging around it (such as coworking spaces).

Conversation notes

  • Lots of innovation happening in Australian FinTech – from the consumer level (using data to customise and optimise service offerings) – through to the backend (AI, blockchain technologies, changing how you structure financial services).
  • Larger financial organisations such are not set up to meet the needs of startups. Startups need help with getting access to capital. Opportunities for smaller companies/FinTechs to fill the gap.
  • Blockchain is developing well here with increasing conversations with Chinese blockchain organisations.
  • Healthy local ecosystems developing in Australia based around startups, including HealthTech, andFinTech. Important to be aware what type of business you are and what industry you are in, so you can immerse yourself in the relevant ecosystem.
  • Key participants or core areas in startup ecosystems include: Regulation technology/policies, Talent, Capital, Physical spaces to work
  • Invoice financing is a rapidly growing area.
  • Untapped potential in commercialising PhD research.
  • Australia is very friendly to ICO’s but regulation is a reality.

 

“Australia is now the second largest alternative finance market in the Asia Pacific region after China.”

 

We live in a world, where we want things done faster. How do we achieve this?

The term FinTech covers a wide range of technology developed for the financial services sector. This sector contributes around 10% of Australia’s GDP, and has great infrastructure, but not all of it is designed for 21st Century needs. We want things done faster, greater access to information, and more choice in almost everything we do. That’s where new and innovative financial technologies come in.

The areas they cover have developed into their own sub-industries. These include:

  • Reg tech – Regulation and compliance technologies.
  • Wealth tech – Such as investment and finance management apps.
  • Legal tech – This overlaps with reg tech and speeds up legal data processing.
  • Blockchain technologies – These are evolving from cryptocurrencies into other forms of online transactions.
  • Lending – No longer just the domain of the big banks, smaller players now use apps to reach clients who may not have had access credit in the past.
  • Trading – With the expansion of the global economy, trading data, exchange and customs documents need to be shared faster than ever before.
  • Money transfer technology – Only around half of point-of-sale transactions are made with cash these days, and that figure is dropping.
  • The rest are done with the click of a button or the tap of a phone.

Are financial organisations set up to meet the needs of start-ups?

One key trend they noted was that many larger financial organisations are not set up to meet the needs of start-ups. Their scale is simply too large. This creates opportunities for smaller companies and financial start-ups to step in and fill the gap, largely using bespoke digital technologies.

Who is leading the innovation?

Many employees of these large firms are now the ones stepping out on their own to fill the spaces their employers can’t cater for. Other entrepreneurs are forming strategic partnerships to make them more competitive against the incumbents or, are forming partnerships with the incumbents themselves to help scale up and maintain consumer trust.

The opportunities don’t stop there, though. Innovation is happening in many spin-off categories as well. The largest areas include health tech, biotech, and ed tech (educational technology), however, there are more opportunities looming by bringing FinTech-type technologies into the media, sports, and agricultural industries – especially given Australia’s strength in these areas.

If you are a researcher, you’d do well to consider how your field of interest could be commercialised before you even start your PhD. Negotiate your terms with your university regarding how you take the knowledge with you afterwards. Currently, many founders in Australia have completed a Batchelor level or thereabouts. However, overseas, many have PhD’s and there are supports springing up to help manage commercialisation negotiations.

All this innovation and activity, is there support available?

With so much activity happening in this space, you’ll find lots of support and resources from organisations like Startup Victoria and Fintech Australia, along with the many accelerator programs and incubator hubs emerging in the state capitals – especially Sydney and Melbourne.

Connect

Danielle’s Linkedin: Danielle Szetho

Danielle’s Twitter: @mdm_z

FinTech Australia Website: fintechaustralia.org.au

StartupVic’s Linkedin: Startup Victoria

StartupVic’s Twitter: @startupvic

StartupVic’s Website: startupvictoria.com.au

dealPad’s Linkedin: dealPad

Ben Williamson’s Linkedin: Ben Williamson

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