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Australia Fintech Industry, Startups Gain Global Recognition

Australia’s fintech sector has come a long way. In just a few years, the nation has seen its fintech industry mushroom and emerge as a globally recognized hub.

Image credit: Fintech by martin louis via Flickr

Fintech is hot topic in Australia. A report by Startup Muster suggests that the sector is currently the most prevalent industry for Australian startups, with 15.9% of national startups operating in the space. Fintech is also among the top areas investors are looking to support, with 56.2% of investors looking at the industry.

In 2016, investment in Australian fintech companies reached a record of US$656 million across 25 deals, more than tripling 2015’s total investment of US$185 million, according to KPMG’s The Pulse of Fintech report.

“In just five years, Australia has seen the creation of a healthy and active fintech sector, from an extremely low base of just US$51 million of fintech investment in 2012 to exceed $600m in 2016,” said Ian Pollari, the global co-leader of fintech of KPMG International and Head of Banking, KPMG Australia.

Australia’s fintech startups

Although London is seen as the clear global leader, there is an opportunity for Sydney to become the fintech hub of Asia, and even become a world leader in areas such as payments, regtech and blockchain, according to a study by KPMG.

The research found that the number of fintech startups in Australia has increased to more than 570 companies from less than 100 in 2014. 60% of these startups are based in Sydney.

Notable players in the lending space include Prospa is a major online small business lender, SocietyOne, an online financial community and one of Australia’s largest consumer lending marketplace platforms, and HashChing, an online marketplace for home loans.

Australia’s Minister for Industry, Innovation and Science Greg Hunt visit the Tyro Fintech Hub, via Tyro

Tyro is Australia’s leading independent payments provider. The Tyro App offers an integrated solution for small business owners to manage all of their finances – connecting them with their accountants, staff, bookkeepers, employees and other signatories.

Tyro opened up Australia’s first fintech hub, dubbed the Tyro Fintech Hub, in 2014 in the heart of Sydney’s financial district. The space hosts dozens of startups.

Blockchain startup identitii aims to reinvent the way information is exchanged in correspondent banking using tokens and distributed ledger technology. The company has built a blockchain solution that works alongside existing central banking systems. identitii’s patented tokenisation technology allows both parties of a payment transaction to be verified in real-time. Headquartered in Sydney, identitii has offices in Singapore and Hong Kong.

Other Australian startups have already begun expanding into the Asia-Pacific region. WAIV, a remittance startup, aims to make inroads in Asia and especially China in the near future. Sydney-based regtech startup GRC Solutions, opened an office in Singapore last year, triggering its global expansion plan. Pin Payments, an online payment startup, is looking to expand to Asia, especially to markets like Singapore, Malaysia and Hong Kong.

Fintech adoption on the rise

Consumer adoption of fintech solutions in Australia is on the rise, and standing above the global average and ahead of the likes of US, Hong Kong, Switzerland and Singapore, according to an EY survey.

According to Simon Cant, president of Fintech Australia, fintech companies are increasingly providing “real choice” for Australians.

“Fintech is no longer just an industry with future potential, it is now an industry which is delivering great on the ground outcomes and becoming the first choice for financial services for many Australians,” Cant said.

“The [EY survey result] illustrates the strong credentials of Australia as a great international launch and expansion market for fintech products, due to its early adoption of new technology and ideas.”

Following in the footsteps of Singapore, Australia is set to host its first fintech festival. Dubbed Intersekt, the event will take place from October 27 to November 3, 2017, and aims to be Asia-Pacific’s most influential and exciting fintech event. It is expected to attract over 1,000 participants including world-class thought leaders and influencers in fintech.

Featured image: Image by Patty Jansen from Pixabay