FinTech Australia releases fintech ecosystem map

Australia’s fintech industry body today released its first member ecosystem map, which helps build domestic and international understanding of the nation’s fintech strengths and diversity, particularly in wealth generation and lending.

The map lists 119 members of FinTech Australia, along with the nation’s key financial services regulators.

“The map is arguably the best visual representation yet of our fintech industry, which is the largest startup sub-sector in Australia according to the most recent Startup Muster survey,” said FinTech Australia CEO Danielle Szetho.

“The broad range, depth and quality of fintechs on this map shows just how far Australia’s fintech environment has come in less than two years.

“Given that FinTech Australia represents about a quarter of all fintech companies operating in Australia, it is in fact arguable that Australia has a greater number of fintech companies than Hong Kong and is on par with or close behind Singapore.”

The ecosystem map shows that wealth and investment, and consumer and business lending, are Australia’s two largest fintech sub-sectors – an outcome that is consistent with findings from last year’s EY FinTech Australia Census.

The strong focus on wealth and investment to some extent reflects the fact that, in 2016, Australia had Asia’s largest pool of funds under management – and the 6th largest in the world.

In addition, Australia’s US$1.6 trillion largest superannuation (also known as pension) market is the fourth largest in the world.

Ms Szetho said fintechs operating in the consumer-facing wealth and investment space have already made major penetrations into the Australian market. For instance, budgeting fintech Pocketbook already has more than 300,000 users, while micro-savings fintech Acorns has well over 200,000 users.

“Many of our fintechs in the wealth and investment area are run by highly experienced financial service executives, who have left large corporate institutions to begin their own innovative startup companies that are unencumbered by large legacy systems,” Ms Szetho said.

In addition, the map shows that Australia’s fintech lenders are rapidly filling market gaps in both consumer and business lending.

For instance, in regard to business lending, a recent survey found that one in five small-to- medium enterprises are now planning to use non-bank financing, compared to just one in ten in 2014.

“Our business lenders are typically using in-house or third party technology to analyse the financial information of small businesses, so they can then offer the best and fastest possible deals,” Ms Szetho said.

“They are able to operate in spaces that banks traditionally found hard to service, and are now playing a valuable role helping our small businesses to grow.”

Other strong areas of Australia’s lending space include invoice financing, peer-to-peer personal loans and also home loan marketplaces that are empowering consumers to get a better mortgage deal on their most valuable assets.

Ms Szetho said the map also showed the many other growing areas of the Australian fintech ecosystem, including payments, wallets and wearables, blockchain/distributed ledger, regtech, insurtech, data aggregators and cybersecurity.

The map also takes a unique approach to laying out the fintech ecosystem by seeking to show where there are overlaps between different sub-sectors.

For instance, the map shows lending and wealth and investment products that rely on marketplace style solutions and payments, along with wallets, payments and wearables companies which rely on distributed ledger solutions.

FinTech Australia plans to update the map at least once every six months.