2 November 2022

The rise and rise of Australian fintechs

Australia has one of the fastest-growing fintech sectors in the world, now worth more than A$4 billion and recently ranked sixth globally – up two places from the previous year – and second in the Asia-Pacific region.

Now the new EY FinTech Australia Census 2022 confirms that Australia’s robust fintech sector is going from strength to strength and is playing a vital role in unlocking innovation-led value from local and global economies.

International investment is helping to power this growth, with a deep talent pool and sophisticated financial and consumer markets making Australia the ideal location to develop innovative fintech products and businesses with the potential for global scale.

The sector as a whole has “significantly matured” over the past 12 months, according to the report by Ernst and Young (EY) and industry body FinTech Australia.

General Manager of FinTech Australia Rehan Mark D'Almeida says this year’s Census shows the local fintech sector and market remain “highly attractive and competitive”.

The Census reveals that 78 per cent of Australia’s 800-plus fintechs are post-revenue, up from 70 per cent in 2021.

The number of paying customers also continues to increase year-on-year among post-revenue fintechs, with 45 per cent reporting more than 500 customers, up from 41 per cent in 2021.

Fintech profitability is being maintained despite global challenges; and the report also noted the greater investor focus on profitability over 2021’s “growth at all costs” approach, which “bodes well for Australia’s fintech sector weathering future storms”.

Payments, wallets and supply chain fintechs were the most successful, with more than 20 per cent of these businesses raising over A$100 million. Australia is renowned for payments systems technology, ranked among the top countries for contactless payment penetration and with more than one in four Australian businesses now operating as cashless.

Today’s Census release comes as fintech leaders from more than 160 countries gather for the world’s largest fintech event – the Singapore FinTech Festival.

As a leading fintech nation, Australia is represented at the festival by over 60 delegates from more than 35 companies and a variety of sectors, including cybersecurity; insurtech; blockchain; payment; regtech; wealthtech; environmental, social and governance (ESG); and more.

The Australian pavilion is expected to attract tens of thousands of visitors over the next three days, with co-exhibitors including the Australian Trade and Investment Commission (Austrade)FinTech AustraliaThe RegTech AssociationGlobal VictoriaInvestment NSW and Stone & Chalk – the largest fintech hub in the Asia Pacific.

“We’re proud to showcase the best and brightest Australian fintechs this year at SFF22,” says Stephen Skulley, Senior Trade and Investment Commissioner, Austrade Singapore.

Tomorrow, Austrade will chair a special segment, highlighting Australia’s Consumer Data Right online system, which enables data to seamlessly cross sectors, allowing businesses like fintechs to develop more innovative products and services. The session will also discuss Australia’s comprehensive open finance model and how it is empowering fintech companies and creating competition.

Earlier this year, Australia and Singapore signed a pact to strengthen cooperation between their fintech ecosystems and develop market expansion in both countries. This follows a similar FinTech Bridge agreement signed by Australia and the UK.

“From an overseas investor and global fintech landscape perspective, Australia’s innovative and sophisticated financial and consumer markets and evolving regulatory environment make it a great place to develop innovative fintech businesses with the potential for global scale,” notes D’Almeida in the Census report.

The last 12 months saw a steady level of successful fintech capital raised, with 45 per cent of respondents raising more than A$10 million (44 per cent in 2021). The Census also found that the government’s R&D tax incentive is a crucial lifeline for the Australian fintech industry, with almost 80 per cent of local fintechs saying it improved the sustainability or growth of their business.

“It’s both pleasing and critical to see growing commitment to incentivise investment, innovation, entrepreneurship and R&D – and the economic opportunities and jobs it generates,” says EY Oceania startup and entrepreneurship leader Malia Forner.