Australia has a thriving fintech ecosystem that is evolving rapidly, driven by the growing appetite for digital services. This is also creating an array of opportunities for international fintechs seeking to expand into new markets.
Given the diversity of the Australian fintech market, there are opportunities across a wide variety of subsectors, including payments, wealth management, data analytics, lending, insurtech, regtech, property tech, P2P, blockchain/distributed ledger, neo-banks and others.
Hiroki Takeuchi, the CEO of UK fintech GoCardless, which also has an office in Australia, advises his company is growing around two to three times faster in Australia and New Zealand than it did in the UK when it first launched.
Further growth opportunities will continue with the introduction of Australia’s Consumer Data Right (CDR) and Open Banking framework, which also includes a commitment to educating consumers and businesses about the advantages this offers.
The Australian Open Banking framework is based on the same structure as PSD2, providing an easy transition for European fintechs seeking to expand to Australia.
The difference in Australia’s approach to open banking however “is that it is the first part of an economy-wide Australian Consumer Data Right,” explains Scott Farrell, senior partner at King & Wood Mallesons and co-chair of the Australian Government’s FinTech Advisory Group. Scott advises that the starting point for Australia’s framework was based on understanding how data can increase productivity and innovation both for the nation and for Australian consumers and businesses.
“This right for customers to control, to make choices, to have convenience and confidence in sharing data, will start with Open Banking and is designed to create a level playing field, where customers can transfer their data when it benefits them. We have already started extending this framework to the energy sector and following that, to the telecommunications sector and in other parts of the Australian economy, including other parts of the financial services system, such as superannuation (pension funds) and insurance. If you are a business in Europe already dealing with the regulatory requirements of PSD2 and GDPR, there is a commonality of the platform, as the technology standards are based on those used in Europe and the United Kingdom”.
“The differences come from the expansion of the landscape that you can apply your technology and business model to, because if you bring your model to Australia, you can bring it not only for banking customers, you can bring it for telecommunications customers, retail customers and energy customers – in fact, you’re able to leverage your open banking business model into the entire customer base of all Australians.”
An important part of the roll-out of Open Banking is that Australians will be informed about the opportunities the system offers them, “as this is a fundamental part of delivering the outcome,” confirms Scott. Australian banks will provide the majority of Australians with access to their data by February next year, with the remainder being completed within the following 12 months.
Fintechs in Australia have also welcomed the establishment of a Senate Committee, which will examine the scope and opportunity fintech offers to consumers and businesses, and ways to continue to foster a positive environment for financial and regulatory technology in Australia.
For more information about expanding to Australia, please contact Sheralyn Derrick at the Australian Trade and Investment Commission office in Milan at firstname.lastname@example.org
We have already talked about Australia and the opportunities that the country offers to fintech in this article