Just catching up on some posts and see Fintech raising its head.
Been slowly collating folder on Fintech / Blockchain for a while now.
Here's just a couple bits info / snaps & links for mkt reports if interested. Enjoy
Link for KPMG Q3 2016 Fintech Report (Global slant)
https://home.kpmg.com/xx/en/home/insights/2016/03/the-pulse-of-fintech-q1-2016.html
Oz Govt (Treasury) link to monitor what the govt thinks, how supports and how regulates going fwd.
http://fintech.treasury.gov.au/australias-fintech-priorities/
EY FinTech Australia Census 2016 Profiling and defining the Fintech sector.
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This is the summary (by
https://www.timelio.com.au/take-away-2016-fintech-census/) of the Census Report and has the link for the full Report below.
Exciting times. The biggest report ever conducted on the Australian Fintech scene has just been released by Fintech Australia in collaboration with EY. The first of its kind, the
EY FinTech Australia Census 2016 is giving us an overdue look at Australia’s burgeoning fintech markets. Identifying where we’re excelling and where we need to pull our heads in. But what do you need to take away from it? We’ve done the hard work for you, and can give you all the important updates and statistics you need to know.
Everyone likes good news, so let’s start with what we’re doing right.
Growth
And lots of it. The report makes it pretty clear that the fintech landscape has A LOT of start-ups. This isn’t really surprising, as you’re going to see that in any new or growing market. Per the report, 64% of current fintech operators have been in business for two years or less. A common strategy identified is that fintech start-ups pick a niche and then stick to it. They know what they do and they do it well.
Talent
Australia is well on its way to creating a working environment which fosters young talent and allows it to grow. The report ranks Australia 5th globally for fostering fintech talent. It also revealed that whilst the perception is that fintech leaders are “twenty-something techno geeks”, this is not the case. With an average age of 41 and only 10% being under 30, the industry leaders are experienced finance professionals.
Capital
As we all know, capital is the lifeblood of all start-ups (not just fintech). The report shows us that whilst Australia currently has quite a shallow pool for capital raises, it is growing. Although it’s not very large, it allows start-ups to raise solid averages, with fintechs in existence more than 3 years raising $5m+ of capital.
Demand
As previously mentioned, fintech start-ups in Australia pick a gap in the market and then fill it. 79% of those surveyed on the appeal of using a fintech start-up vs a traditional provider, cited that fintech’s offered a more effective solution. Marc L’Huillier from EY says “[Fintech start-up’s] positioning resonates because it’s edgier, more contemporary and, most importantly, delivers a product that meets a specific need.” In short, fintech’s positioning as ‘not a bank’, and their push to fill gaps in an easier, more convenient way is a fresh change that Australian consumers are receptive to.
Environment
As we’ve previously seen, the Australian fintech environment is experiencing growth. We’re fostering new talent, we have the available capital and investors, and we have products that fill a need. According to Imran Gulamhuseinewala, Global Head of FinTech for EY, “the environment has to foster and enhance collaboration and create opportunities for a collision of ideas [through] …hubs, accelerators and meetups”. With the establishment of organisations such as Fintech Australia, increased fintech specific events like last week’s CollabCollide, and increasing numbers of fintech hubs across Australia, the opportunities to grow the industry and collaborate can be taken advantage of.
And now let’s take a look at where we could improve…
Talent
There’s two sides to every coin, and whilst we’re creating a good environment to foster new talent, 58% of fintech leaders agree that Australia is currently short on experienced start-up and fintech talent. Whilst we are taking the necessary steps to address the shortage of talent, it remains a short-term problem.
Capital
The biggest challenges fintech start-ups face in regards to capital are the shallow investor pools, impatient investors and mixed success rates. Less than half met expectations with their capital raise. Tim Coyne, EY’s Transactions Advisory Fintech Lead says “As fintech solution maturity improves, increasing investor appetite will be an important factor in the establishment of an innovation-led future; government policy will need to continue to support and enable this change”. However, as with other emerging industries in the past, as it grows, so too does the investor pool and government support and therefore may not be a challenge for long.
Demand
Australia ranked last on EY’s global ranking for demand. Being a relatively new industry, fintech hasn’t had the opportunity to build the relationships and customer trust that other countries have. With 50% of fintech start-ups nominating customer acquisition as an external challenge this puts Australia a little behind the bell curve when it comes to adoption. Another obstacle is the need to build relationships with the major banks and financial institutions, helping to build trust and dispersing fintech to a wider audience. This task will fall to the founders and leaders of fintech firms.
Environment
The biggest environmental challenge is accessibility to hubs and fintech co-working spaces; therefore the amount of contact for ‘idea collision’. With 69% of existing fintech’s agreeing that accelerators and incubators are important to the success of the fintech industry, it is important that start-ups take advantage of the opportunities that are available to them. This is easier in places like Melbourne and Sydney, the current leaders of the fintech space in Australia, but should be considered important by start-ups that exist outside of these cities as well.
So, there you go. At 48 pages, we’re more than happy to have done the legwork for you. Overall, Australian Fintech is shaping up to be a strong industry, and future growth will rely upon a focus on the five key drivers of success: talent, capital, demand, policy and environment.
