Fintech in Australia has achieved a lot in the past year, but the president of the industry body says there’s still much to do – and so little time – for the country to beat international rivals knocking at the door.
“The urgency for this is only becoming more acute as we face the potential for significant disruption from major overseas players over the next few years,” said FinTech Australia president Simon Cant.
Cant told Business Insider that the biggest threats come from existing tech giants in China and the USA, such as Apple, Google and Facebook.
“These companies have the resources and expertise to use their existing platforms and large customer base to deliver entirely new payments and other fintech solutions to Australian consumers.”
Cant, who is also managing director at Westpac’s venture firm Reinventure, urged governments and traditional financial institutions to “invest heavily” in the fintech community to stop Australia from losing revenue to foreign players.
The battering of the local media industry should act as an omen for the finance industry, which he said is the nation’s largest with 400,000 employees.
“There is a similar parallel here in the way that Silicon Valley technology companies have undermined the revenue base of our major media companies, leading to significant job losses and loss of shareholder value at Fairfax, News Corp and other companies.”
BrickX chief executive Anthony Millet agreed, saying Australian fintech already “lagged behind” the USA and Europe.
“But the global sector is in its infancy compared to its potential. This is reflected in the amount of venture funding that is globally being committed to the sector.”
Millet said that unlike other areas of technology, fintech had an advantage that startups didn’t need to go global to succeed.
“Not having to rely on international expansion to become a success removes a key and significant risk in a venture and should aid our sector in attracting fresh talent, funding and creating success stories.”
Cant said that, with near real-time payments coming in October and an open data regime due next year, the time is ripe for traditional banks and startups to start collaborating.
“Banks and fintechs need to work together to have the best possible chance of developing globally competitive solutions in the face of what is likely to be intense overseas interest,” he said.
“To this end, incentives from governments at the Australian and state levels to encourage collaboration would be highly valuable.”
Millet called for “continued dialogue” between the two sides to develop “a level playing field” and “mutual respect”.
“The assistance each can provide to one another will set strong foundations for the future,” he said.