FinTech in Australia is on the rise as the country implements the Consumer Data Right (CDR), a 2018 Australian law that gives consumers more control over how their financial data is used.
The FinTech industry has seen immense growth globally in the past decade as other countries implement their own versions of the CDR. The Open Banking movement is transforming the financial services industry by giving consumers more choice over the products and services they receive from banks and other financial organisations like FinTech companies.
What Is a FinTech Company?
FinTech companies are exactly what the term suggests; technology companies that specifically service the finance industry. They can serve as stand alone financial service providers or partner with major banks, financial organisations, and other FinTech companies to deliver more impactful products and services to consumers.
What Is an Example of an Australian FinTech?
86 400 is a prime example of an Australian FinTech that has made its mark in the financial sector. As Australia’s first smart bank built for smartphones, 86 400 gives consumers more control over their finances with comprehensive real time banking services right in their pockets.
When searching for account aggregators and a way to seamlessly integrate with customer’s financial data, 86 400 partnered with Envestnet | Yodlee for their market leading financial data experience. The access to Envestnet | Yodlee’s deep market insights allowed 86 400 to provide greater access to a wider range of data for their customers.
86 400 and Envestnet | Yodlee’s partnership is the perfect example of how FinTech companies are bringing their collective expertise, financial data, and technology to the Australian financial sector. These innovative solutions put customer experience, quality of service, and security above all else.
How Many FinTechs Are There in Australia?
According to FinTech Australia, there are over 800 Australian and New Zealand FinTechs, with the industry predicted to grow to over $4 billion by the end of 2020. In 2015, the FinTech space was estimated to be worth $250 million in comparison.
This rapid growth shows how Australia’s financial sector is leveraging the power FinTech companies can provide in helping businesses and consumers manage their finances and achieve financial wellness.
The services and capabilities FinTech companies provide allow customers to make more informed financial decisions and empowers them to take control of their financial future.
Who Are the Major FinTech Companies in Australia?
From offering better banking services to more efficient home loan processing, the following Australian FinTechs are trailblazers in the industry. They’re unlocking a variety of benefits for businesses and consumers.
Afterpay Touch is a payment processing platform that provides payment, fraud prevention and compliance services to businesses. The touch system platform gives business owners instant access to all payment services within a single intuitive experience.
Businesses can easily lower payment processing time and costs thanks to Afterpay’s services and technology.
H2 Ventures is a FinTech company and investment group that has been investing in a variety of FinTech startups for nearly 10 years. Their portfolio companies all take part in a 6-month in-house pre-seed program, and all provide unique services.
Examples of small businesses that H2 ventures helped grow include Spriggy, a platform that teaches children about money management based on real life experiences, and Birch, which helps consumers take advantage of credit card rewards.
Judo Bank is an SMB business bank challenger dedicated to getting Australian businesses greater access to the funds they need with unmatched service. They seek to bring back relationship banking by providing more relevant and personalised services.
Some banks’ propositions include business loans to support growth or investment in early stage businesses, line of credit services, equipment loans, finances lease services, and more.
Athena Home Loans
Athena Home Loans provides home loan solutions to consumers by bypassing traditional banks’ funding methods. They also offer visual calculators to help consumers understand their home loan estimates, whether they’re looking to refinance or buy a home.
The alternative to home lending Athena provides consumers shows how FinTech companies can disrupt major banks' hold on market shares by providing more streamlined and efficient lending options.
The Future of FinTech in Australia and New Zealand
Open Banking gives consumers more control over their financial data like the types of data they share, and the organisations they wish to share it with. FinTech companies who wish to provide consumers direct access to banking services, such as intuitive budgeting, investment or payment tools, must first become accredited “data recipients” with the Australian Competition and Consumer Commission (ACCC) who is overseeing Open Banking’s implementation.
The Open Banking regime will continue to transform the FinTech landscape and what consumers come to expect from banks and other financial service providers. Similar trends have happened in the European Union following the implementation of the Payment Services Directive 2 (PSD2), or the California Consumer Privacy Act in the United States. Leaders in FinTech point to Asia as the next frontier for the new industry after Australian banks and FinTech companies become open banking ready.