SYDNEY, AU: The global Fintech market is booming in Australia since 2014, when investment activity tripled to US$12.21 billion from US$4.05 billion in 2013. This activity continued in 2015 with an increase in global funding into Venture Capital (VC) backed Fintech startups. In 2015, an investment in the Australian Fintech market totalled A$ 438 million and was concentrated in innovation hubs in Sydney; in particular, the Tyro Fintech Hub and the Stone and Chalk Fintech Hub.
Frost and Sullivan that address the global challenges related to growth opportunity forecasts that the Australian Fintech sector will grow at a CAGR (compound annual growth rate) of 76.36% and reach A$ 4.2billion by 2020.
Fintech offers services in the area of Financial Technology, it is an economic industry composed of companies that use technology to make financial services more efficient.
Fintech investments were focused in Australia, China and Singapore, and in 2015 elevated to reach US$3.46b. Asian Fintechs assembled strong support, with funding growing by 413%, whilst North American funding grew by 59%. While China has been the best performer so far, Australia is poised for exponential growth.
In 2015 the total market size of the Australian Fintech sector was estimated at A$247.2m. Frost & Sullivan anticipates sharp growth in the Fintech market in both 2016 and 2017, followed by steady increases through to 2020.
Growing consumer confidence and popularity of new Fintech products will see steady revenue growth in digital payments. In Personal and Business Finance, the share of revenue to mobile oriented personal finance solutions will expand as consumers become more comfortable with peer-to-peer lending, micro-investing and mobile based book-keeping. Financial Infrastructure and Data Analysis will increase in revenues, but become more concentrated as the share of revenues to vendor and enterprise oriented solutions offered by the Financial Infrastructure and Data Analysis segment slowly increases. However, these revenues will decrease as a share of the entire Fintech sector revenues
“Australia’s Fintech market has both internal and external growth drivers” says Audrey William, Head of Research, ICT Practice, Frost & Sullivan Australia & New Zealand. “The investment environment for Fintech companies is incentivised with aggressive low taxing and generous investment tax exemptions. The Australian Federal Government has extended a 20% tax offset for early stage investments up to a total investment value of $200,000, and capital gains tax exemptions for direct and indirect investments held for at least three years. It has also created a Fintech Advisory group committed to simplifying and creating new regulations to help Fintechs raise VC funding, develop and provide more financial products and access more financial data than was previously permitted.”