Stuart Stoyan is urging fintech startups in Melbourne to complete a non-invasive 17-question survey as part of a broader initiative aimed at establishing a collective voice and creating better support mechanisms for Melbourne’s fintech community. Information gathered from the survey will be used to propose support from government, both at local and state levels, as well as corporates.
Launched last Wednesday, the Fintech Census is the first step towards the development of a comprehensive fintech vision and strategy for Melbourne. Stoyan, who founded the initiative, is adamant there are great fintech innovations coming out of Melbourne, but is concerned the city is falling behind due to lack of coordination. Although there are emerging success stories such as Moula, MoneyPlace, Coinjar, and Square’s recent decision to be based out of Melbourne, at the moment there is no clear indication of the size or depth of the fintech community in Melbourne. In fact, all we know is that Melbourne’s Fintech Meetup group has about 700 members.
As such, the survey seeks to find out how many fintech startups there are in Melbourne, what subsector they operate in (e.g. lending, payments, cryptocurrency, insurance, etc.), what internal and external challenges they are facing, what kind of support they need, and other key pieces of information needed to create an initial plan of action.
“It’s become really hard to articulate what Melbourne’s fintech community was about. This is the first step towards coordination … It’s a bit of rallying cry to say ‘let’s consolidate ourselves’ so we can then represent who we are, what we’re about and what we need,” said Stoyan, who is also the founder of peer-to-peer and online lending startup MoneyPlace.
Over the past few years, Sydney has been strengthening its position as Australia’s financial services powerhouse, with the emergence of fintech-focused coworking hubs like Stone & Chalk and Tyro, as well as fintech-focused venture capital firms like Reinventure and AWI Ventures. According to a study commissioned by KPMG, Sydney’s financial services sector produces 5 percent of Australia’s GDP – that’s more than half of Australia’s financial services industry as a whole, which contributes the highest share of sector value to the national economy (9 percent GDP). Interestingly, though, in the early decades of the 20th century, Melbourne was Australia’s financial services capital.
Although Stoyan is worried that Melbourne is lagging behind Sydney, he pointed out that the big four banks are split between Sydney and Melbourne: “It’s not about competition. Sydney’s got more capital markets, but Melbourne’s got a bigger superannuation industry.”
However, being based in Melbourne, it’s understandable that Stoyan’s first focus is promoting more favourable conditions for fintech startups in Melbourne. As the founder of a fintech startup himself, he’s quite familiar with the unique challenges fintech startups face, especially those based in Melbourne. He said that although there are great coworking spaces in Melbourne like York Butter Factory, The Hub and The Cluster, fintech startups have slightly different needs to other startups. For example, working in an open plan environment is not necessarily appropriate for fintech startups that have to take customer privacy into account.
“There are privacy considerations for fintechs. If you’ve got customer data, that’s confidential, so working in a completely open plan environment is not appropriate,” said Stoyan.
He added that fintech startups also need access to networks that are fintech focused: “This could be introduction to partners from financial institutions; it could be access to accounting or legal professionals that specialise in getting financial services licenses which is very complex process. The ability to have specific advice around fintech and being able to talk to other startups who have gone through that experience is important … At the moment, support infrastructure is not there for fintechs in Melbourne.”
Stoyan also pointed out that fintech businesses typically take longer to set up due to regulatory and structural complexities.
“Licensing takes a significant period of time. What fintechs are looking for is support through that process to make that process as efficient as possible, and also support in getting to that process. For example, having corporate partners or a government partner that provides a free coworking space would mean fintechs don’t incur costs while waiting for a license. Initiatives like that is more likely to encourage people to make the jump from a corporate role into fintech,” he said.
Stoyan did however praise ASIC’s John Price, Mark Adams and Deborah Ralston and their efforts towards creating an online hub with tailored content for fintech businesses.
“[ASIC] recognises that as a regulator they need to engage differently with fintechs because they’re a different type of entity. The [Innovation Hub] has become a great way to accelerate fintechs to market, but once you’re in market, how do you form partnerships? There needs to be a way to make it easier to engage with somebody in one of the big four banks. There are 30,000 people working in the banks, so how are you to know who to speak to?” said Stoyan.
“It’s not just about making it easier for fintechs, it’s also about making it easier for corporates and government to engage with fintechs as well.”
Earlier this year, the Victorian government announced that it had allocated $60 million for startups in the State, however, there is yet to be any indication as how the funds will be used.
“Part of the reason why the government has not been able to act is because they’re not clear about who they’re acting for,” said Stoyan, who added that the initiative will help government understand who they’re representing.
When it comes to startups, including fintech startups, part of the problem could be that no-one can predict which specific technologies and business models will be winners in the long run. The only thing that is certain at the moment is that the traditional financial services landscape is being disrupted by new entrants leveraging technology to deliver new and existing services in smarter and more convenient ways to consumers and businesses. It is for this reason, Stoyan pointed out, that governments, corporates, regulators and other industry stakeholders need to support fintech through a strong alignment of activity and investment.
While the initial survey questions are basic and non-invasive, Stoyan said he would be looking to create a more detailed survey in the future to better understand what innovations, policies or tools are required across the public and private sectors to help grow the capacity and economic impact of Melbourne’s, and more broadly, Australia’s fintech sector. It’s still very early days, but Stoyan is open to the prospect of growing the initiative into a fintech-focused industry association that gives the sector a unified public voice.
The survey can be accessed via fintechcensus.com. Stoyan is keen to hear from everybody in fintech, whether they’re an established team, a local offshoot of a global business or just one person sitting in a cubicle at a major financial institution thinking about pursuing an idea.
“It’s important to here from all levels because the support needs to be provided across all levels,” said Stoyan.
Featured Image: Stuart Stoyan, Founder of MoneyPlace and FinTech Census. Source: Provided.