FinTech Australia — Rebecca Schot-Guppy
Following the release of their Global FinTech Index, Findexable recently hosted a series of webinars with various FinTech hubs around the world. In “The Asian Century”, FinTech Australia, FinTechNZ and Tokyo FinTech discussed how FinTech hubs compare with startup hubs, what some of the differences are and what that implies in terms of the challenges between building a FinTech hub versus building a startup center.
Rebecca Schot-Guppy, the General Manager of FinTech Australia, shared her perspective on the rankings presented:
Australia is growing the FinTech sector quite aggressively, so as a small country, we are batting above average. I do not necessarily agree with the classification of Sydney as the Australia hub — three out of four unicorns are based in Melbourne, and something like eight out of ten of the biggest FinTechs are based there.
However, what is important about this, and why Australia is such a good FinTech hub is that we have four big institutional banks, two of them based in Melbourne and two in Sydney. So it creates a perfect landing pad for FinTechs wishing to expand into APAC. You can test your product in a small ecosystem, which has good adoption rate. Australia was still ranked 19th in Ernst & Young’s FinTech Adoption Index.
It is important to have metrics and rankings to measure the state of the ecosystem, but I think what is even more important is to look to other markets and to see what they are doing well, and how you can replicate that. So in Australia at the moment, we are going through a Senate inquiry into FinTech and RegTech, particularly focused on capital investment, regulatory sandboxes and data. With FinTech Australia, we have formulated recommendations, including our view on other markets regarding these aspects, and presenting those to the committee. I think benchmarking is important to encourage government and regulators to put more effort into a sector, but what is more important is actually listening to other market and determine what we can learn from them.
For that, we are looking at Singapore and some of the things they are doing well in relation to the funding of and investing in technology and startups. Also, they have a single data governance entity, rather than multiple regulators looking after data, like we have the in Australia. We think the UK does a very good job in relation to investment, particularly early stage investment, and getting VC capital into the market. We are also looking at London and obviously the UK for the Consumer Data Right (CDR), which is our version open banking that is kicking off the moment. We have looked at the open banking successes and failures, for example consumer adoption, how it has been rolled out, the right access, etc.
I don’t think getting more unicorns will make the market more successful. Instead, consumer awareness will really drive market success in Australia, so making sure that consumers know about the products in the market, whether that is “Buy Now, Pay Later”, which is already a unicorn, whether that is the ability to transfer money overseas with lower FX rates or fees, or to switch banks banks more easily due to open banking. General consumer awareness will drive growth. In addition, given that Australia is a relatively small market, we need to build the capability to export our FinTechs and make them a success overseas as well, to be able to scale successfully.
Therefore, international collaboration is important, and it ultimately benefits our members and gets them more customers. Most of us here run member organizations, so our objective is to help our members grow, and connecting them into the right party or the right regulator overseas is very important. Also, when you have conversations with other regions and other markets, you often get a few takeaways, insights that we can bring back to implement in our own market.
Looking ahead, in the Australian market, we have the rollout of CDR coming, and the final report of the Senate inquiry, which will be quite juicy really. Over the next few years, we would like to see an increase in R&D programs to allow more FinTech startups to get access. We would also like to see increased capital injection so that early stage can get help to grow. Lastly, we would also like to see a shared KYC function.
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