Fintechs still struggle to reach out to insurers and the wider financial services sector, according to the third annual EY FinTech Australia Census.

The proportion of fintechs that consider building partnerships with incumbents a key external challenge has increased to 46% from 40% last year.

“Many fintechs report that the major financial services organisations remain difficult to engage with and slow to act,” the census report says. “Some talk of having ‘hit a wall’.”

Legacy structures and mindsets are among the barriers fintechs face. The industry’s frosty reception may force fintechs to seek alternative partners in the UK and other countries.

“Since the first edition of the census, major institutions have invested substantially in fostering internal innovation and actively engaging with fintechs.

“However, the fintech community remains frustrated about the extent to which this is actually being realised. The question is, will this attitude drive some Australian-domiciled fintechs overseas to countries where the level of support from traditional players may be greater?” 

These frustrations aside, the census reveals a flourishing sector in which median revenue growth is up 2.25 times compared with last year and the proportion of profitable players has risen to 19% from 14%. About 67% expect to hire more staff in the next year and average capital raised by each fintech has risen to $4.5 million from $4.1 million last year.

Insurtechs now make up 11% of the fintech sector, up from 5% last year.