Home / Daily / Hayne has led to closer collaboration, say fintechs
17 October 2019
Australia’s fintechs believe relationships with insurers have improved since the Hayne royal commission, a new survey has found.
The EY/FinTech Australia Census, released today, is based on a survey of 120 fintechs, including insurtechs such as Blue Zebra, Claim Central Consolidated, and Cinch.
Almost half of the respondents (49%) say that since the royal commission they have seen a stronger uptake of fintech solutions by consumers, and 26% say incumbent financial institutions have become more willing to partner with them.
The census data shows that almost a quarter (23%) of local fintech companies are now running at a profit – up from 19% last year – and median revenue has grown 80% from this time last year.
“The Australian fintech sector is continuing to mature and grow, becoming increasingly profitable and globally connected,” EY Australia Fintech Adviser Meredith Angwin said.
“A key theme we are seeing this year is an increase in the degree of collaboration between fintechs and traditional financial services players.
“While still highly competitive, it’s fair to say that there are much more mature, streamlined and effective relationships emerging.
“There is increased recognition of the need for partnerships and collaboration for the benefit of consumers and the financial services sector as a whole.”
The survey shows a drop in the number of founders who believe there is a lack of fintech talent in Australia – down to 43% this year from 58% in 2016.
It also shows a gradual increase in the proportion of female employees, growing from 22% in 2016 to 32% this year.
“Significant work has gone into encouraging women in the fintech sector,” FinTech Australia GM Rebecca Schot-Guppy said.
“To see female representation strongly trending positively is incredibly heartening for the industry.”
A tightening of access to capital highlighted in the census is “reflective of the wider economic environment”.
Local fintech capital raisings are reducing in number and, of those that have attempted to raise capital, only 45% raised more than $1 million in their latest round (compared with 63% last year).
The proportion of founder-funding is up significantly, from 60% in last year’s census to 75% this year.
“Overall, we are seeing less success in capital raisings and lower levels of funds being raised,” Ms Angwin said.
“At the same time, the funding that is available is becoming more conservative and skewing towards the more established and experienced fintechs.”
The outlook for the sector remains positive with 81% of fintechs expecting to grow their revenue within the next year, 64% expecting to increase their number of employees, and 51% planning to expand overseas.
Click here to read the full report.