Australia is a leading market globally for adoption of new financial services technologies, according to a report from Ernst & Young, with a particular focus on money transfer and payment services.
The report ranked Australia fifth overall following China, India, the UK, and Brazil, with an adoption rate of 37 percent among the country’s ‘digital population’. The global average is 33 percent, with the US hitting on that mark but major markets including Hong Kong and Singapore trailing with 32 percent and 23 percent, respectively.
The Australian adoption rate has grown significantly since the first report was released in 2015, when it sat at 13 percent.
With the previous report having predicted the rate would double, Meredith Angwin, Fintech advisor at EY, said these figures surpassed expectations.
“Fintech startups have been very successful in building on what they do best, using technology in novel ways and having a laser-like focus on the customer,” she said.
According to the report, the main barriers to adoption of fintech services are decreasing in importance as consumers become more savvy about what is out there.
Seen as a barrier by 44 percent of respondents in 2015, consumers not being aware services existed is now an obstacle for just 19 percent, while consumers preferring to use a traditional financial services provider also dropped from being a key barrier for 23 percent of respondents to 10 percent.
Simon Cant, president of Fintech Australia, added that the ranking shows fintech companies are increasingly providing “real choice” for Australians.
“Fintech is no longer just an industry with future potential, it is now an industry which is delivering great on the ground outcomes and becoming the first choice for financial services for many Australians,” he said.
“We hope that this index result attracts the attention of domestic and international fintech investors as it underscores the opportunity for investors in this market to back fintechs that can rapidly attract material market share.
“The result also illustrates the strong credentials of Australia as a great international launch and expansion market for fintech products, due to its early adoption of new technology and ideas.”
The growth of the Australian fintech landscape comes after solid support from government and regulators over the last few years.
As well as a regulatory sandbox to help fintech startups more easily test their products and services, the Australian Securities and Investments Commission (ASIC) has put into place a number of cooperation agreements with its counterparts around the world, the latest with Hong Kong’s Securities and Futures Commission (SFC) to help fintech companies in each market more easily expand into the other.
The agreement will allow the SFC and ASIC to refer fintechs to each other for advice and support via ASIC’s Innovation Hub and the SFC’s Fintech Contact Point, with both looking to help businesses better understand the regulatory situation in each market.
Meanwhile, looking to help the fintech ecosystem expand further out of Sydney, the Victorian Government also earlier this month announced its plans to establish a fintech hub in Melbourne.
The space will aim to bring together investors, corporates, researches and startups together to collaborate in a centralised space, helping to boost Melbourne’s image as a fintech city and attractive location for investment.