Lvl 29 Chifley Tower, 2 Chifley Square, Sydney NSW 2000
+61 (0) 2 9238 4218
Monday-Friday, 9AM - 5PM
Acumen Finance Banner Image

The Evolution of Fintech in Australia

The big four banks in Australia. Westpac, Commonwealth, ANZ, NAB.


Financial technology, or fintech, is a groundbreaking sector of commerce which has risen from the ashes of the Global Financial Crisis (GFC). Innovative fintech startups emerged in the years after the GFC, disrupting traditional banking and lending while benefitting consumers through their virtual banking and nontraditional lending combined with progressive technology. In the aftermath of the crisis, governments tightened banking regulations and cracked down on dangerous lending practices. Initiatives like Basel IV, which comes into effect in January 2022, and organisations like APRA and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry are reforming the guidelines, which continue to limit traditional banking, increasing the need for the development of the fintech community. As reforms inhibited the major financial players and big four banks: National Australia Bank, Commonwealth Bank, Australia and New Zealand Banking Group, and Westpac, fintech in Australia rose to a new high. It is estimated that around 60% of digitally active adults now being considered fintech adopters and the alternative finance market was valued at over $1.1 billion USD in 2019. In 2020 fintech will continue to grab a greater market share as artificial intelligence (AI), machine learning, big data and blockchain technology all deeply impact our world. Fintech companies that harness these cutting edge technologies will streamline their internal processes and improve consumer experiences. As virtual exchanges and integrated platforms win out over brick and mortar structures, Acumen Finance stands ready to accommodate the needs of consumers in the commercial mortgage and private lending sectors. Let’s take a look at how the market will transition in 2020 and beyond.

Where We Stand

Millennials and Gen Z consumers around the planet are flooding the market searching for streamlined services and alternative lending as they drive the shift towards virtual banking and cashless societies. Besides the generational shift, startup hubs have been especially vital for the rise of fintech in Australia. Sydney is the current nexus of fintech development, with more than 50% of fintech companies holding their main offices here. This urban centre has a large pool of potential workers with access to accelerators and incubators, like Springboard and Stone & Chalk, that could propel Australian fintechs into becoming stronger competitors in the international market. In 2020 local fintech companies are projected to begin overseas expansion. Airwallex, for example, offers cross border payments systems and has already attracted foreign investors to contribute $202 million USD to their startup capital. The Consumer Data Right (CDR) Bill, which passed in August of 2019, has begun a new era in open banking and data transparency. Consumers will now have ownership of their highly valuable data and the rights to control who has access to it. This will also enable secure and easy data sharing between financial institutes, which could result in pioneering new financial products, better deals for clients and more competition in the market.

Looking Ahead

Where is the industry headed in 2020? Revenue for fintech in Australia is forecasted to reach more than $4 billion AUD this year, as the sector embraces open banking and improved AI technologies while reaching out to the markets of the unbanked, millennial and Generation Z users. The unbanked constitutes a significant sector of consumers who haven’t had access to traditional banking infrastructures in the past. Through the increase in digital penetration, mobile phones, digital wallets, and mobile apps the unbanked population are finally able to access secure savings and credit, channels to send and receive currency, make cashless purchases and better manage financial emergencies when they happen. An inclusive market offering these benefits to the unbanked will influence the overall trend of the world’s movement from cash-driven to cashless exchanges. Cryptocurrency and blockchain technology are also major influencers on this transition. Most recently ‘cryptowages’ were approved in New Zealand, which could be the beginning of businesses around the globe using bitcoin and other cryptocurrencies as valid forms of compensation.

The fintech industry in Australia will continue to increase market share as more consumers move to digital banking and nontraditional methods of finding commercial mortgages, private lending and P2P lending. The fintech revolution in these sectors will aid consumers by allowing them to access the capital they need, streamlining the loan process, removing biased lenders and replacing them with AI and blockchain technology, and securing their data. Overall, fintech is making things safer and more accessible for consumers and increasing competition in the banking industry, which is a tough break for big banks, but a boon for clients trying to navigate the financial market. Acumen Finance is here to assist with all your commercial and personal lending needs, from property loans to private mortgage lending through our seamless online loan facilitation platform. Contact us to find the most efficient and secure lending solution for your personal endeavour.