The three trends supporting fintech growth in Australia

Australian fintechs – short for ‘financial technology’ – are a small but fast-growing corner of Australia’s tech sector. These companies are driven by a shared mission: to revolutionise the delivery of financial services for the benefit of customers. By embracing new and emerging digital technologies that address evolving consumer demands, they are each demonstrating exactly how powerful disruption can be when it comes to banking and payments, credit and lending, insurance and wealth management. 

According to FinTech Australia, 800 fintech companies call Australia home, and collectively, they have grown the local fintech industry from a $250 million industry in 2015 to a $45 billion one in 2023. Out of all the 500 fintechs in Australia, five have so far reached a valuation of over $1 billion to achieve unicorn status –  AfterPay, Airwallex, Judo Capital, MYOB and PEXA. That’s no small feat, becoming a unicorn highlights each companies’ exceptional performance, innovation, and market demand for their products or services.

So, what are the trends behind these incredible fintech successes on Australian soil?

Trend 1: A landscape ripe for innovation

Australia has one of the largest pools of managed funds in the world, valued at A$3.6 trillion in 2024*. It leads the world in contactless payments, with three in every four transactions at the point of sale now being contactless**. Plus, Australia has one of the highest penetrations of smartphones globally, with around 80 per cent of the population owning one.

Amongst the public, there is a keen openness to new financial products which naturally translates to higher fintech product adoption rates. In fact, Australia is a global leader in the Buy Now Pay Later (BNPL) sector, with almost one in ten Australians using a BNPL product in 2019. Cloud-based services come into the picture too 42 per cent of businesses use paid cloud services. And finally, Australia ranks as the tenth-largest eCommerce market in the world by revenue, reaching $32 billion in 2019.

In short, Australians do not shy away from technology, which makes the local market a fantastic testing ground for new fintech products.

Trend 2: Emerging and foundational tech

Every fintech’s success is rooted in the use of both emerging and foundational technologies.

Blockchain technology, and its decentralised nature and robust encryption, is revolutionising transactional processes by eliminating the need for traditional intermediaries such as banks. Artificial Intelligence (AI) and Machine Learning (ML) enable more personalised financial services, risk assessment, fraud detection, and customer support automation. Data analytics and predictive analytics allow them to mine unprecedented insights from customer data, market trends, and transaction patterns. And Application Programming Interfaces (APIs) facilitate integration with third-party services, enabling fintech companies to offer a wider range of products and services to their customers. 

Cloud-based Enterprise Resource Planning (ERP) systems – like NetSuite – are also a staple for fintech companies, offering agility and scalability crucial for rapid growth. These modern IT infrastructures streamline operations, enabling fintechs to scale globally without the burden of heavy capital expenditure. Additionally, integrated ERP and financial systems provide real-time insights and reporting, facilitating more accurate decision-making and compliance.

Virtually Human Studios’ innovative business model relies on the use of non-fungible tokens (NFTs), cryptocurrencies, and blockchain technology. Yet NetSuite cloud ERP is the tech that powers the businesses behind the scenes by allowing the company to seamlessly manage crypto, financial consolidation & reporting, multi-currency conversions, and inter-company transactions on a single platform. You can learn more about NetSuite for SaaS and fintech businesses with this guide to selecting NetSuite.

Trend 3: Government support

The Australian government has been another strong driver for fintech innovation, with a range of initiatives and policies aimed at fostering growth and competitiveness in the sector:

Regulatory Sandbox: The Australian Securities and Investments Commission (ASIC) operates a regulatory sandbox program that allows fintech start-ups to test their products and services in a controlled environment without full regulatory compliance. This initiative promotes innovation while ensuring consumer protection.

Fintech Bridge Agreements: The Australian government signed fintech bridge agreements with several countries – including the United Kingdom and Singapore – to facilitate collaboration, information sharing, and market access for fintech firms operating in both jurisdictions.

Funding and grants: Funding and grant programs are made available to support fintech innovation, such as the Fintech Business Advisory Services Fund and the Export Market Development Grants (EMDG) scheme. These initiatives providefinancial assistance and resources to help fintech start-ups scale and expand internationally.

Regulatory reform: Regulatory reforms have been introduced to promote competition and innovation in the financial services sector, including the Open Banking regime and the Consumer Data Right (CDR). These reforms aim to empower consumers by giving them greater control over their financial data and promoting the development of new fintech products and services.

Clearly, there’s never been a better time to launch, grow and scale an Australian fintech that may ultimately cement your company as Australia’s sixth fintech unicorn of all time.