Number of FinTechs in Australia passes the 700 mark

25 January 2021 Consultancy.com.au 4 min. read
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The latest roundup of Australia’s FinTech landscape shows more than 100 new FinTechs entered the in-demand segment over the course of the past twelve months, with lending apps and blockchain technology dominating the market entry list.

Professional services firm KPMG last examined Australia's FinTech market back in September 2019, when there were just short of 630 active FinTechs in the country. Per the latest study published, this number stands over 730 – signalling rapid growth in a year that posed unprecedented economic challenges.

“Despite the impacts of Covid-19 on the economy, increased digitisation across financial services and new customer behaviours have created new opportunities for innovation,” noted Daniel Teper, National FinTech Lead at KPMG Australia.

KPMG FinTech landscape Australia

A quick look at growth by sub-segment is enough to back up this assessment. A core product of Covid-19 has been squeezed cash flows. With thousands of businesses in need of liquidity, it is not surprising that lending apps – specifically those targeted at small businesses – have jumped by over 30%, amounting to 26 new businesses.

The biggest jump was however in the blockchain space, where 49 new entrants marked a 150% increase over the last year. This is also in keeping with broader market trends, where blockchain has soared to record highs in the last few weeks and months. The cryptocurrency has emerged as a possible alternative to gold, in that it offers a hedge against inflation and general economic turbulence.

The payments landscape, meanwhile, remains dominant, with more than 150 active companies and a jump of nearly 6% over the last year. Other sub-segments seeing growth include InsurTech, capital markets and Neobanks – signaling the breadth of influence being gained by FinTech.

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“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.” Consumers are certainly hopping on board the bandwagon. Already in 2019, fellow Big Four accounting and advisory firm EY published a report that showed nearly 60% of Australian consumers using FinTech services of some kind. 

With Covid-19 and the broad based transition to online life and business, the need for managing personal finances digitally has only intensified. This momentum might just cover that extra mile for FinTech adoption, and the direct upshot has been a spike in investments flowing into the sector.

As explained by Teper, “we are also starting to see increased levels of corporate M&A activity, as traditional players show an interest in FinTechs’ product innovation, technology and market proposition and to help pivot their core businesses, as well as compete with some of the global FinTech providers entering, or looking to enter, the Australian market.”

A 2019 KPMG study revealed that Australia was home to seven of the world's top 100 FinTech companies. With investor interest spiking by the day, the market is poised to get even stronger.

KPMG is itself among the more active players in Australia’s FinTech landscape. Stepping early into the game, the firm acquired FinTech company Markets IT back in 2016 – a move that country CEO Gary Wingrove described at the time as “timely and strategic.” This was followed a year later by the acquisition of Matchi – a global FinTech matchmaking platform.

Having built its own capacity in the space, KPMG now facilitates FinTech growth in Australia and around the world. KPMG Australia runs the Mutuals FinTech Accelerator – a 12-week programme that connects promising startups with the country’s most progressive mutual banks. This is in addition to advising on myriad mergers & acquisitions in the space – a function helmed by Teper himself.