KPMG's 2023 Australian fintech survey highlights current trends and sentiments in the Australian fintech market.
The report provides insights into key challenges that fintech leaders are facing around revenue, funding, resources and customers, and outlines opportunities available for the Australian fintech sector.
Fintech industry trends in the Australian market
- Challenging economic conditions
Uncertain market conditions and an overall shift in investor sentiment have led to subdued growth, further hindered by high interest rates and inflationary pressures.
- Moderate growth expected
Fintech leaders are expecting moderate growth over the coming year as conditions of economic uncertainty and the rise in the cost of capital persists.
- Raising capital remains a key challenge
The majority of Australian fintech firms indicated that the key challenge for the next 12 months will be raising capital.
- Challenging startup environment
The uncertainty around economic conditions and tigher capital raising market continue to limit the fintech startups ecosystem.
- Unfavourable job market conditions
The percentage of fintech firms indicating that they are not satisfied with their ability to recruit in Australia is increasing.
- Payments sector still a leading category
Consumer trends suggest there is a continued decline in cash usage, while at the same time an increased use of mobile devices for payments, and rising awareness of alternative payment methods.
- Regtech solutions grow in popularity
Investment and demand continues to grow despite the challenging market conditions.
Australian fintech opportunities and challenges
|More than half of our respondents are finding current economic conditions more challenging than last year.|
Over 53 percent of fintech firms in Australia are finding current economic conditions more challenging compared to last year.
Australian fintechs are expecting to face challenges around raising capital, customer acquisition, resourcing and revenue contraction in the next 12 months. The capital raising environment continues to be difficult to navigate, particularly for early-stage tech firms. However, organisations that are focused on near-term, self-sustained profitability will be more likely to weather the storm and continue to attract fintech funding.
In addition, we expect a continued period of rationalisation will likely take place over the near-term, with consolidation expected in areas of over-participation or where scale benefits are critical to building a profitable enterprise.
Looking ahead, if Australia successfully brings inflation in line with targets, we can assume pressure on the market will ease and investors may feel safe to refocus on growth assets again.
Australian Fintech Survey Report 2023
KPMG's fintech survey report highlights the difficulties faced by the fintech market both globally and in Australia, where both total investment and the number of deals materially dropped compared to 2022. In 2023, there has been a modest decrease in the number of fintech firms active in the Australian fintech ecosystem compared to previous years, the first time we have recorded a decline since our analysis began.
Focusing on areas of interest such as revenue & funding. resources and customers, our report covers key trends and the overall sentiment of leading Australian fintech businesses.