KPMG’s inaugural KPMG Fintech Survey was conducted over the course of 2021, gaining insights from leading Australian fintech firms in areas such as revenue, funding, resources and their customers. The report analyses and highlights emerging trends, challenges and opportunities prevalent in the Australian fintech sector.
Australian fintech industry trends
Now sixth in global fintech rankings, Australia’s capital cities are benefitting from several influential megatrends and becoming increasingly attractive hubs for talent and investment. Underpinned by digitally native generations coming of age, the development of fast-growing subsectors and an evolving regulatory environment, Australian fintech is experiencing a rapid rise in the creation of new companies, the volume and value of investments, and the demand and interest in tech-integrated solutions.
As Australia progressively recovers from the pandemic, the growth and rise of fintech innovation will only proliferate. The strong collective fintech investment of AUD $3.6 billion of 2021, which nears the AUD $3.2 billion pre-COVID levels, provides a sense of optimism for 2022 as startups continue to mature and incumbents adapt. The challenges of the pandemic have accelerated the adoption of fintech products and services, and provided the foundation for consumers to assess their options and experiment with alternative financial services solutions.
Emerging B2B and B2C trends such as open banking and embedded finance are contributing to the development of new ecosystems and evolution of business models. Digital technologies are allowing fintechs to provide services that focus on customer centricity through new and complementary offerings, enhanced online interactions and highly efficient operational capabilities that enable a desirable customer experience.
Despite the broader Australian economy facing significant challenges and uncertainty, Australia’s fintech sector proves its resiliency as firms pivot and evolve to maintain growth. With the number of Australian fintech businesses more than doubling between 2017 and 2021, the traditional finance industry is compelled to have digital innovation at the forefront of their strategic priorities.
Opportunities and challenges in Australian fintech
The findings outlined in the report fundamentally signify the maturation and continued opportunity within the Australian fintech sector. Advancements in innovation and a surge in investment demonstrate the ability of Australian businesses to establish themselves as key players within the broader global fintech landscape.
Payments, lending and regtech sectors feature the highest number of Australian firms and will likely be the areas which attract significant investment in the coming years. Sixty-seven percent of respondents are actively looking to raise capital within the next 12 months and the overwhelming majority (95 percent) indicated they are seeking to hire more local staff. This substantiates the considerable growth of the Australian fintech ecosystem despite talent acquisition consistently ranking amongst the top challenges faced by industry.
The Australian fintech sector continues to evolve and mature
The survey report findings evidence the Australian fintech sector’s continued growth and maturation – with innovation and rising investment occurring across a range of different sectors. We expect this trend to continue well into 2022 and predict that over the coming years we will see Australian fintech firms establish themselves as truly global players within the international fintech landscape.
