A new paper published by credit reporting agency CreditorWatch says 2021 has been a “watershed” for the local fintech industry, which notes that there are now 733 fintech businesses in Australia, up from 629 at the end of 2019.
As Australia made its way through the COVID pandemic over the last 12 to 18 months, demand for digital products surged heavily as most shifted to remote working. The Future of Fintech 2021 paper notes that as more people moved to digital, their confidence grew so much that they are now more comfortable using technologies, which the fintech sector has been able to capitalise on.
Last month’s $39 billion acquisition of Afterpay has also been credited as a pivotal moment for the industry in the last year, which CreditorWatch CEO Patrick Coghlan said was buoyed by a significant increase in digital technologies.
“The local fintech sector has never been hotter, and our Future of Fintech 2021 thought leadership paper outlines exactly why this is,” CreditorWatch CEO Patrick Coghlan said.
“The paper is part of our commitment to bring new thinking to the market through thought leadership.”
The paper continued that as consumer confidence with digital technologies grow, cross-partnerships and big banks’ interest in fintechs, such as Westpac’s agreement with UK-based tech provider 10x, will also help to improve consumer choice for banking products and services.
Moving forward, it is predicted that fintechs will completely transform financial services to the point where payments are likely to be immediate in the next five years, while cash use will continue to decline and cheques will be “obsolete”.
“Fintechs have a role to play at all points in the financial system,” FinTech Australia CEO Rebecca-Schot Guppy said.
“They create new ways to make payments and act as gateways throughout the financial system.”
The main driver of Australia’s “fintech” sector has been regulatory failure. “Fintechs” have been given a regulatory free pass, while their competitors have been swamped with wave upon wave of bad regulation. Sooner or later the consumer harm caused by this disastrous regulatory failure will come to light.