As the nomination deadline for FinTech Australia’s inaugural awards approach, the industry can look back at the past 12 months as a landmark year for startups in the sector.
FinTech Australia chief executive Danielle Szetho said last week that people are starting to realise innovations arising from entrepreneurs are “the future of financial services”.
“The fintech industry is moving into the mainstream and is now a key part of our $150 billion financial services sector,” she said.
Investment in Australia’s fintech startups increased from $US185 million in 2015 to a whopping $US656 million last year, while the rest of the world went backwards over that period, according to statistics from KPMG.
“Similar to what we have seen globally in 2016, Australia’s performance was driven by some large deals, and specifically M&A and private equity transactions,” KPMG Australia global co-leader of fintech Ian Pollari said earlier this year.
“While mega deals result in peaks and troughs in overall figures, the trend is clear and demonstrates increasing interest and investment activity in fintech.”
The increased investment could be seen as a direct reaction to the changing habits of end customers. Business Insider reported in February that the country’s largest bank, Commonwealth, had observed significant shifts in consumer behavior – ATM and branch transactions are plummeting while cardless cash, tap & pay and pay tag numbers are surging.
Perhaps the most telling stat is that the CommBank mobile app has gone from facilitating $1.5 billion worth of transactions per week in June 2014 to $5.5 billion weekly by last December.
The year has also seen plenty of success among individual ventures. Small business lender Prospa clinched the biggest fintech VC investment in Australian startup history, getting $25 million in February in a round led by AirTree Ventures. Online retail facilitator BigCommerce completed a $41 million funding round in Silicon Valley in May, while Afterpay and Touchcorp merged in February to form a new $350 million giant.
Australian fintechs were internationally recognised on the annual Fintech 100 list in October. Established stars Prospa (number 31), Tyro (43) and SocietyOne (50) were honoured in the main list of 50 companies, while Afterpay, Brighte, Data Republic, Identitii, Hashching and Spriggy all made the 50 emerging stars list.
The last year saw regulations starting to open up for fintech startups.
In December the Australian Securities and Investments Commission announced a range of licensing exemptions to act as a “sandbox” environment to stimulate innovation.
A new blockchain standards roadmap was announced in March by Standards Australia, in a move that Szetho said would “spark” innovation among local entrepreneurs.
A government inquiry recommended in March that the big banks be forced into opening up access to customer data to help fintechs develop and test their products. The parliamentary committee advised that if the banks do not provide access by July 2018, penalties could be applied.
And just last month, the senate ushered in new crowdfunding laws that’s opened up a new source of cash for unlisted public companies from ventures such as Equitise and CrowdfundUP.
The fintech industry can celebrate the year in person at the first-ever FinTech Australia awards galas night on May 24.
Nominations across the 30 award categories will be accepted until April 21.