The EY FinTech Australian Census 2017 has been released. Around 600 Fintechs are operating in Australia, the number has grown quite fast. More are generating revenue, and some are profitable. Australia is ranked 5th on their global analysis.
EY was commissioned by FinTech Australia to conduct a census of fintechs in Australia over the last two years. A broad research program was set in place in collaboration with a FinTech Australia steering committee. The research was conducted between August and September, 2017.
This report presents the key findings based on 166 quantitative online surveys, 10 in-depth interviews and 16 vox-pop style interviews.
They conclude that around 600 Fintechs are operating in Australia, having more than doubled since 2015. A greater proportion of fintechs have been in business for more than three years. 71% of businesses are now generating revenue. What falls under the ‘fintech’ banner is now much broader (think RegTech, cyber/digital security, Data Analytics etc.) and firms that would see themselves as ‘fintech’ are stretching far and wide into other tech industries (e.g. Agtech, etc.)
The findings show that 45% are targetting retail consumers, 43% targetting banks and other FSI’s and 35% targetting SME’s or other start-ups.
Wealth management was the largest industry segment at 30%, followed by lending at 20%, then analytics 18%.
The largest number are based in NSW (54%).
Funding remains a challenge, and private funding dominates.
In 2016, most fintechs in Australia have received some private funding (72%). Six in ten (57%) accessed some commercial funding and on average have raised $4.2m in capital; this is greater than the average amount of $2.2m raised by fintechs that exclusively accessed private funding.
One in seven fintechs stated that they are currently profitable. Of those that have not started to realise profit, their current burn rate is on average $115k a month. This is an increase in what was seen last year where the burn rate was $84k month.
Australia ranked 5th with a 37% adoption rating. While in the shadows of the quite different markets of China (69%) and India (52%), Australia is on par with other developed economies with similar financial systems (e.g. US and UK).
The growth rate in Australia is one of the fastest.
