Australia’s Fintech industry growing rapidly. This is according to a report by EY and FinTech Australia. The 2017 EY FinTech Australia Census indicates that Aussie FIntech companies experienced a 200% annual median revenue jump in contrast to year prior. The Census, released today at the Collab/Collide Summit in Melbourne, describes the Australian Fintech ecosystem as blossoming over the past 12 months. A total of 37% of Australia’s digitally active population are now Fintech users, compared to 13% in 2015.
Now in its second year, the Census was the first Fintech industry report of its kind in the world and remains the only report of its type in Asia.
Some of the key findings in the Census include:
- Median monthly revenue growth by post-revenue fintech companies was 208% (or 3.1 times) from June 2016 to June 2017.
- 24% of Fintechs are reporting that revenue growth increased by more than 700%.
54% of companies said expanding overseas (or expanding their existing overseas operations) as a priority for the next 12 months – up from 38% in the 2016 census
- Countries targeted for expansion are the United Kingdom (49%), Singapore (40%), United States (38%), New Zealand (27%) and Hong Kong and Canada (22%).
- Improving the research and development initiative (87% support), government mandated open data controls (85%), capital gains tax relief (85%), reduced payroll and other taxes (83%) and more transparent access to the New Payments Platform (82%) top the list of the industry growth initiatives voted as most effective by Fintechs.
- Disappointingly little change to overall gender diversity, with the proportion of female fintech employees moving only slightly from 22% in 2016 to 24% in 2017
- Fintechs are still having trouble collaborating with banks and other financial institutions, with 40% citing this as an external impediment to their business (in 2016 the figure was roughly the same at 41%)
Customer acquisition and growth is a priority, Fintechs are reporting increasing talent pool shortages in sales and marketing, with engineering talent still remaining a challenge.
FinTech Australia Chair Simon Cant lauded the progress made to date on the national Fintech sector;
“The fact that the industry has experienced a tripling in median revenue is a strong sign that fintech firms are acquiring customers and making strong inroads into the traditional financial services sector. Equally so, it is exciting to see that fintech firms are now sufficiently comfortable with their domestic positions to be increasingly planning international expansions. This is another sign of a healthy and maturing industry.”
While complimenting sector growth, Cant said much work and reform, specifically regulatory reform, was necessary to fuel Fintech expansion.
FinTech Australia Deputy Chair and Census Founder Stuart Stoyan said the Census provided a strong evidence base to help FinTech Australia to advocate for policy and regulatory change.
“It’s become clear from this year’s Census that taxation reform, specifically around providing better access to research and development incentives and capital gains tax relief, and a mandated open financial data platform are key policy priorities for fintech firms around the country.”
Stoyan also added that FinTech Australia would continue to drive increased female participation in the industry.
“Our programs have included a speaker gender equality target at the Intersekt Festival, ensuring at least 30% of the FinTech Australia board are women and by promoting a Female FinTech Leader of the Year award at our annual Finnies awards.”
Meredith Angwin, EY FinTech advisor, said the Census results reflected significant advancements made by the Australian fintech sector over the past twelve months.
“With the 2016 Census, we saw a snapshot of a sector that, while growing, was still in its relative infancy. This year’s results though show that Australian fintech has really started to come of age, with substantial increases in the proportion of fintechs that are now post revenue as well as those that are planning international expansion. Coupled with an impressive average year on year revenue growth, there have clearly been some great strides made in the last year. But there is still more work to be done if the sector is to reach its full potential.”