Government incentives, industry collaboration and global talent acquisition will be critical to sustain the growth trajectory of Australia’s fintech sector, build a world-class fintech export market and attract the best international tech companies onshore, EY says.

The latest EY FinTech Australia Census – co-funded by EY, FinTech Australia and Austrade – finds the 2021 fintech sector “a standout hero preparing for even greater international expansion”.

“With more concerted and coordinated support, the sector’s trajectory would be unstoppable,” FinTech Australia CEO Rebecca Schot-Guppy said.

Fintech – a term which includes insurtech – matured rapidly throughout the COVID pandemic, with record investor capital raised and increasing numbers of start-ups moving to post-profit. Digital acceleration caused by the pandemic was driving fintech innovation, EY says, leading to strong revenue generation from overseas markets and new jobs. New job creation featured and an increasing number of fintechs were preparing for international expansion.

Thriving innovation has been aided by greater collaboration between incumbent institutions and start-ups to address challenges at speed and capitalise on emerging opportunities and changing customer needs, EY says, as incumbents need the agility of fintechs to compete, while fintechs need the incumbent customer base to achieve scale.

“With competition from big tech, large overseas players and non-traditional sectors taking advantage of innovations in embedded finance, fintechs and incumbents have no choice but to collaborate further and faster,” it said.

“There are early signs that collaboration and partnership through joint ventures, investments or transactions are the best way for incumbents and fintechs to co-exist …. rather than disrupting each other.

“Seeing more collaboration between fintechs and incumbents is a promising indicator of sector maturity.”

This year’s Census showed 82% of fintech’s had capital raising expectations either met or exceeded, up from 57% in 2020.

Skilled visa programs and employee retention schemes would help Australian fintechs to grow and attract new talent, EY Oceania fintech leader and EY Asia-Pacific payments leader May Lam said.

“The value of the Australian fintech sector as a national export has never been clearer,” she said. “We must build meaningful and globally competitive growth pathways for Australia’s startup sector. Increased certainty around incentives, better coordinated collaboration and strong moves to drive industry diversity will all help us build a world-class fintech export market.”