FinTech Australia today welcomed a major report which shows that Australia has among the best fintech market penetration in the world, ahead of other advanced markets such as Hong Kong, Singapore and the United States.
The EY FinTech Adoption Index shows that Australia is now ranked fifth highest out of 20 surveyed markets for fintech consumer adoption.
This represents a big jump from the 2015 index, which showed Australia was ranked fifth out of six surveyed markets.
Australia’s improved ranking is based on the fact that 37 per cent of Australia’s digitally active population are now fintech users, compared to 13 per cent in 2015.
This means Australia has, from 2015 to 2017, leap-frogged Hong Kong, Singapore and the United States in the ranking table and also stands ahead of other markets such as South Korea, France, Canada and Japan.
In addition, between 2015 to 2017, the number of Australians who said they would prefer to use a traditional financial services provider dropped from 23 per cent to 10 per cent.
Fintech companies are typically new financial services entrants who are providing genuine alternatives in areas such as wealth generation, lending, payments, insurance, cyber security and regulatory management.
Australia has in the order of 400 fintech companies, with 72 per cent of these companies supplying services to businesses and 54 per cent supplying services to consumers.
“This index shows that fintechs are increasingly providing great services and real choice for Australians when it comes to financial services,” said FinTech Australia president Simon Cant.
“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.
“We hope that this index result attracts the attention of domestic and international fintech investors as it underscores the opportunity for investors in this market to back fintechs that can rapidly attract material market share.”
“The result also 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.”
Mr Cant said the index also reinforced the urgency for ongoing and timely government regulatory support, including in creating an open financial data framework and expanding the scope of Australia’s regulatory sandbox, to ensure that Australian fintechs can fully capitalise on the Australian consumers’ appetite for innovative financial services.
Australian Treasurer Scott Morrison said: “I welcome this result showing Australia is becoming one of the highest adopters of FinTech in the world.”
“FinTech adoption is good for the economy and good for Australian consumers. It also helps reduce tax avoidance and criminal activity, which levels the playing field for everyone.
“These results shows the Turnbull Government’s plan to make Australia a global FinTech centre is working. It will drive better outcomes for customers and businesses, making financial services cheaper, providing new and easier ways to obtain financing, faster services and more options.”
EY FinTech advisor Meredith Angwin said: “What the Adoption Index clearly shows is that FinTech is gaining widespread traction, both locally and globally, and has achieved the early stages of mass adoption in most countries.”
“In our previous report, we predicted local FinTech adoption rates were set to double and that has certainly been the case, with usage among digitally active Australians rising from 13% in 2015 to 37% in our latest survey. FinTech start-ups have been very successful in building on what they do best – using technology in novel ways and having a laser-like focus on the customer.”
EY’s FinTech Adoption Index is based on 22,000 online interviews across the world. The EY Fintech Adoption Index can be found here.
Last week, FinTech Australia released its inaugural member ecosystem map, to help build domestic and international understanding of Australia’s fintech industry.