Supporting Fintech Growth and Innovation in Australia

According to KPMG, investment in Australian fintech has grown from $53 million in 2012 to over $675 million in 2016. There were less than 100 fintech startups in 2014 and there are 579 companies as of August 2017. Ultimately, fintech is expected to add $1 billion (AUS) to the Australian economy by 2020.

Audrey William, Head of Research, ICT Practice, Frost & Sullivan Australia & New Zealand, says Australia’s fintech market has both internal and external growth drivers. “The investment environment for fintech companies is incentivised with aggressive low taxing and generous investment tax exemptions. The Australian Federal Government has extended a 20% tax offset for early stage investments up to a total investment value of $200,000, and capital gains tax exemptions for direct and indirect investments held for at least three years. It has also created a Fintech Advisory group committed to simplifying and creating new regulations to help fintech companies raise VC funding, develop and provide more financial products and access more financial data than was previously permitted.”

Envestnet® | Yodlee® supports the fintech community in Australia by providing API access to secure, consumer-permissioned financial data from over 16,000 global data sources. For example, we work with startups that help people manage their personal finances, obtain loans, make payments, and invest spare change into their superannuation funds (the Australian version of social security). Below are a few Australian startups that leverage our APIs to build innovative financial solutions for consumers.

Finch is a social payments app that enables users to send money to friends after sharing lunch, pay back your share of drinks or concert tickets, or even run a tab for sharing expenses. It can also show spending habits and categories, helping users understand where their money is going. Finch is combining data intelligence, behavioural psychology and gamification to present your financial world in a way you’ve never seen before.

Acorns Australia is a micro-investment app that rounds up your credit card and debit card transactions, and invests the spare change into the Australian stock market (which they call the share market). Acorns has created six different markets, from Conservative to Aggressive where users can place their money. The more you invest, the higher your returns, and it’s an excellent way to get introduced to share trading for new investors.

Carrott is another micro-investment app involving “lazy cash” (spare change) roundups of your credit/debit card purchases, but these investments go toward a user’s superannuation, which is like Australia’s social security fund. Your change is saved in your own account, until it reaches $5 and then it’s placed into your super fund. Since many Australians run about $3,000 per year short on their annual retirement (based on a $40,000 annual living budget), this is a good way to start saving for the future easily and passively.

MoneyBrilliant is an expense tracking and budgeting app that aggregates a user’s different financial accounts, turning it into easy-to-understand budgeting tools and financial reports. It’s able to provide customized budgets, based on the automatic spending categories used in the Australian market. They have also added a bill watch service that alerts users to changes on their normal utility costs. If the costs increase, the user is then prompted to find a less expensive gas or electric provider. It helps users develop healthy spending habits by giving them a holistic look at their financial situation.

We work with other Australian financial service providers as well, enabling developers to build the next generation of innovative and disruptive financial solutions using our APIs and cloud based financial data platform.

To learn about the latest perspective on the implications, challenges and opportunities the new Open API directive creates for financial institutions and fintech companies, register for this webinar by FSTMedia and Envestnet | Yodlee.