Australia's fintech industry median revenue up 200 per cent from 2016, major research report finds

Australias financial technology (fintech) industry is rapidly maturing and growing, with companies enjoying a 200 per cent annual median revenue jump and increasingly planning to expand overseas, the 2017 EY FinTech Australia Census has found.The Census, released today at the Collab/Collide Summit in Melbourne, finds that the Australian fintech ecosystem has blossomed over the past 12 months, although far more work needs to be done for the industry to reach its full potential.Based on survey results from 166 fintech companies, the Census is the only comprehensive industry-backed analysis of the Australian fintech industry.Now in its second year, the Census was the first fintech industry census in the world and remains the only report of its type in Asia.Among 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.
• About a quarter (24%) of fintechs are reporting that revenue growth increased by more than 700%.
• This revenue increase trend is particularly pronounced among companies less than three years old
• 54% of companies nominated expanding overseas (or expanding their existing overseas operations) as a priority for the next 12 months - up from 38% in the 2016 census
• The main targets 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.
• There been 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%)
• As the fintech industry matures, and customer acquisition and growth becomes a priority, fintechs are reporting increasing talent pool shortages in sales and marketing, with engineering talent still remaining a challenge.

The Census results closely align with another research report, the 2017 EY FinTech Adoption Index, which in June 2017 found that Australia has leap-frogged Hong Kong, Singapore and the United States to have among the best fintech market penetration in the world. A total of 37 per cent of Australias digitally active population are now fintech users, compared to 13 per cent in 2015.FinTech Australia Chair Simon Cant said the Census results illustrated that Australias fintech industry was increasingly becoming the first choice of financial services for many Australians.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, he said.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.In saying this, there is a vast amount of work we need to continue to undertake to remove some of the barriers to our industrys growth. This includes growing and diversifying our talent pool and driving ongoing policy and regulatory reforms.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.Its become clear from this years 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, Mr Stoyan said.Mr Stoyan said that FinTech Australia had been, and 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, he said.EY FinTech advisor Meredith Angwin said the latest Census results reflected some of the 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, Ms Angwin said.This years 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.A fact sheet on the Census findings is available here.The full Census can be found here.About FinTech AustraliaFinTech Australia is a national association for the Australian FinTech Startup community. Our vision is to make Australia the leading market for FinTech Innovation and Investment by working with both sides of Government, Industry and the Australian FinTech community to create a supportive environment and partner ecosystem in Australia and abroad.For more information visit www.fintechaustralia.org.auMore informationMark SkelseyHead of PR and CommunicationsFinTech AustraliaPh. 0403197523Email: mark@fintechaustralia.org.auAbout EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.For more information visit ey.com.au