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Fintech comes of age as consumers embrace change

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The number of fintechs has more than doubled since 2015 to about 600 and revenue is rising, indicating the sector is maturing, according to the latest EY Fintech Australia Census.

The proportion that have been in business for more than three years has increased, along with the percentage now in the “post-revenue” stage (71% compared with 57% last year), indicating products and service offerings are in demand and filling market gaps.

Another indicator of a flourishing sector is that monthly median revenue among fintech businesses tripled between June last year and June this year.

The census shows insurtech accounts for 5% of fintechs, and Australia is the world’s sixth most developed insurtech market.

The “fintech” banner is now much broader, covering regtech, cyber and digital security, and data analytics. Businesses that would consider themselves as fintech stretch far and wide into other tech industries such as “agtech”.

EY’s Fintech Adoption Index shows the Australian public has a high level of receptiveness to fintechs: Australia ranks fifth worldwide with a 37% “fintech adoption rating”, compared with the global average of 33%.

“This level of adoption shows fintech is now at a tipping point where it is poised for mainstream adoption,” the census report says.

About 54% of Australian fintechs surveyed have plans for overseas expansion within the next year – up from 38% last year.

Government policy initiatives most popular among census respondents include improving research and development initiatives (87%), government-mandated open-data controls (85%) and capital gains tax relief (85%). Open data in particular has come under the spotlight, rising to second on the ranking from fifth last year.