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Financial services and fintech

Sophisticated, deep and liquid capital markets make Australia one of the major centres of financial markets activity in Asia. The strength of our financial services sector is underpinned by a mandated retirement savings scheme, a highly skilled and multilingual workforce and advanced business infrastructure.

All this makes us a great place for fintechs to do business – both startups and established players. We offer a fintech-friendly regulatory regime, an early adopter, digitally-savvy population, and a depth of fintech talent.

By bringing your fintech business to Australia, you’ll be joining a mature and innovative ecosystem with strong links to all major fintech markets around the world. We’re doing great things in sub-sectors like neobanking, payment systems, wealthtech and regtech.

‘Australia is embracing a fintech future and has great support for new fintech players.’ – Ryan Edwards-Pritchard, from the UK, now based in Sydney

Australia 6th in the world, 2nd in Asia Pacific | Sydney 11th city in the world, 3rd in Asia Pacific – Source: Findexable 2021 Global Fintech Rankings 

Embracing a fintech future

Australia has been an early adopter of financial services innovation and technology. We’re backing ambitious fintech startups with government support to export financial services. We’re also supporting two blockchain pilots to reduce business compliance costs. Fintech startups are entitled to tax offsets, and early-stage startups can claim a rebate of 62 cents for every tax dollar they spend on R&D.

 

Joseph Healy and David Hornery, Judo Bank
‘Australia has a strong economy that has been built over generations by an entrepreneurial spirit, foresight and passion.

Today this migrant mindset continues to fuel the growth of our economy and broader society. With unparalleled lifestyle opportunities and a business environment that’s based on a strong and diverse small business sector, Australia provides opportunities for global talent to thrive.

The Australian Government’s growth-focused business support plays a pivotal role in helping Australian companies attract the best talent in the world to our shores, and this contributes significantly to the culture, diversity and skills of our business landscape.’
– Joseph Healy and David Hornery,
Judo Bank co-founders

Open for business and growing fast

Built on the strong foundations of our A$9.5 trillion financial services industry, our fintech sector is leading the world, with 800+ operations and 15 fintechs listed on the Australian Securities Exchange.

Our fintech ecosystem includes incubators and accelerators, major banks, industry associations, venture capital firms and government. 

‘Australia is well poised for rapid growth in the sector to attract investment and create jobs’ – Senator Andrew Bragg, Chairman of the FinTech Select Committee

According to the FinTech Australia EY Census, more than three quarters of Australian fintechs are post-revenue, and one quarter of those companies have year-on-year growth of more than 300%. 

This is no surprise with so many Australian organisations and incubators dedicated to helping startups and businesses succeed. These include:

Australian Digital Innovation on the Rise charts opportunities in the startup, venture capital and technology sector. 

Startup hubs are common in most Australian cities. Places like Stone & Chalk in Sydney, Melbourne and Adelaide, Haymarket HQ in Sydney and The Precinct in Brisbane attract innovators and foster networks.

Australia’s banks also invest directly into promising fintechs through their venture capital arms such as Reinventure and X15.

Podcast: Bloomberg interview with Lucy Liu, Airwallex

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A wealth of fintech opportunities

Australian consumers are technologically savvy – almost two-thirds of digitally active adults use fintech products. This has led to a demand for customer-centric products, services and solutions right across the Australian financial services sector.

‘Increased digitisation across financial services and new customer behaviours have created new opportunities for innovation. The overall impressive net growth in the number of fintechs illustrates both the robust market dynamics and a strong support for the fintech sector in Australia’ – Daniel Teper, National Fintech Lead, KPMG Australia

Australia’s Consumer Data Rights and New Payments Platform, together with identity requirements, are driving confidence in new products and so creating new opportunities for fintech businesses.

We are early adopters of technologies to support decentralised finance and cryptocurrency assets, and there is plenty of potential to introduce equity-related fintech products and services in capital markets, with a good mix of local boutique and global investment banks in Australia.

With a fast-growing fintech ecosystem in Australia, there are opportunities for businesses and individuals with expertise in:

  • data security
  • predictive analysis
  • artificial intelligence
  • machine learning
  • robotics
  • natural language processing
  • 5G
  • Internet of Things
  • cloud technologies
  • blockchain.

Fintech-friendly regulators

In Australia, regulators and industry are working together to create a ‘fintech-friendly’ environment. We have secure and stable financial services regulations – vital for consumer confidence – and a significant software and technology talent pool.

Australia’s regulatory agencies take an innovation led approach to new business models and assets classes. As a founding member of the Global Financial Innovation Network (GFIN), ASIC supports pathways for foreign fintech companies to operate within Australia.

Sub-sector opportunities

Sub-sectors offering a wealth of opportunities to develop, source and scale next-generation fintech include neobanking; payment systems, transfers and digital wallets; wealthtech; and regtech.

Australia as a testing ground

Australians are enthusiastic adopters of new technology which makes us a great place to trial new tech. We were one of the first testing grounds for contactless payments, for example. 

We’re popular as a testbed for Asian fintechs who want to enter western markets because we are demographically similar to much of Western Europe and North America. The population has high smartphone penetration and is digitally and financially literate. We have excellent financial inclusion with a banked population of nearly 100%.

Opportunities for regional expansion

Australia’s financial sector regulation is recognised as world’s best practice. We provide a transparent and secure base for launching new operations within the region. 

Sector growth has been steady at around 9% per year over the last 20 years. We’re building on these strong foundations and making Australia a financial centre of the Asia-Pacific region. We currently lead the region in investment management, real asset financing and securitisation. 

We have mutually beneficial trade agreements with the UK and Singapore to reduce barriers to entry and promote opportunities in each market. For example, the UK-Australia FinTech Bridge helps Australia’s fintech ecosystem directly engage with customers, investors and regulators with one of the world’s largest fintech markets.

Incentives, grants and support

Newcomers to the industry can access support through a number of sources, including Venture Capital Limited Partnership Program grants and for finance services exporters, the Export Finance Agency offers a range of programs.

We also offer a host of tax incentives, such as:

  • Attribution managed investment trust tax regime
  • Foreign resident capital gains tax regime
  • Non-portfolio dividends – exemption
  • Offshore Banking Units.

The Australian Trade and Investment Commission has detailed information on the additional support for fintech companies to expand and attract foreign investment. The peak industry body is Fintech Australia.
 

Fintech

  • Almost 60% of digitally active adults in Australia used Fintech products in 2019
  • Australian Fintech recorded $US 101.1M investment in first half of 2019
  • International fintech firms in Australia:
    • NASDAQ OMX
    • OnDeck
    • CRiskCo
    • 10x Future Technologies
    • OakNorth
  • 7 Australian companies in KPMG’s 2019 Global Top 100: Airwallex, Judo, Afterpay, Athena, Daisee, Slyp and Sempo

 

Financial services

  • US$6.6 trillion assets, 4.8 x Australia’s nominal GDP
  • One of the largest pools of contestable funds under management globally, valued at over US$850 billion
  • 4th largest pension pool – US$2 trillion in pension assets
  • 5th largest pool of managed funds – US$2.2 trillion in funds under management
  • 9th largest stock market – US$1.2 trillion 
  • 10th largest foreign exchange market – US$119 billion OTC foreign exchange daily turnover
  • 11th largest total debt securities outstanding – US$1.96 trillion
     
Anthony Eisen, CEO and Co-founder, Afterpay
Australia is rapidly becoming a major global technology and financial services hub. We have the talent, infrastructure, location and lifestyle necessary to be among the best in the world. As an Australian company, Afterpay is proud to play a role in making that happen.

The Australian Government’s support for innovation, through initiatives like the Global Talent Visa Program, help us attract the best talent globally and bring them to Australia. This is vital for us to compete on the international stage while growing jobs and skills in Australia. Over time, this also plays a critical role in fostering the next generation of local start-ups.
Anthony Eisen,
CEO and Co-founder, Afterpay

Factsheet

Australia’s financial services and fintech ecosystems

Recent arrivals

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