The first question, “What is Fintech?”
Financial services and technology are intertwined and have been for many years. The term "fintech" was coined fairly recently to describe the broad landscape of financial technology. Fintech encompasses any technology used to support and enable banking and financial services. Innovations considered fintech would span the areas of:
Fintech applies to any innovation in the way business is transacted. Financial technology once referred to computer technology used in banks or trading firms. Today, fintech covers a broad range of technology, spanning from personal to commercial finance. Fintech companies are in the business of replacing and enhancing services offered by the financial industry.
Fintech's Expanding Horizons
Traditional banking, investing and other financial products are quickly becoming a thing of the past. Brick and mortar financial institutions remain, but products and services formerly accessible only through a visit with a sales associate are now available online. The convenience and lack of overhead are a driving force toward financial technology innovations. Banks, their business and personal clients, businesses and consumers have all been affected by these innovations. Consumers and businesses alike use digital devices for mobile banking, investing, paying bills electronically, shopping and more.
Fairfax Media listed areas of fintech where financial services are being disrupted:
Fintech Globally & Down Under
Globally it is reported that fintech startups acquired more than $17 billion in funding in 2016, with the sum increasing annually. CB Insights’ studies show that the US and Asia are leading the pack with the most fintech startups, respectively. The global accounting and finance firm KPMG stated:
”While addressing the organizational response to fintech disruption is proving challenging to many institutions, two-thirds of Australian respondents (67%) had a clear strategy in place, compared to just 47% globally.”
Money has been digital for a long time. As innovations exploded in the financial sector, customer expectations rose at an equal pace. In Australia, banks compete among themselves, as well as with eBay and Amazon. Australia’s banks have no choice but to pay attention to how digital data can enhance the customer experience. They have accepted that survival is now dependent upon collaboration with the fintech sector.
The most active areas of innovation focus on:
The Australian Leaders
Several Australian fintech companies have been recognized as world leaders. Several made the list of the global top 50 for innovation and disruption of the financial services industry. Three companies standing out in the fintech boom in Australia include:
Prospa
Prospa states that their vision is to, “…change the way small business owners experience finance.” They are a leader in online lending to small businesses. Applications take approximately 10 minutes and offer same day approval with 24-hour funding possible. Prospa uses a smart proprietary technology platform to focus on the health of each business to determine creditworthiness.
Lendi
Lendi is Australia’s first online home loan platform, matching borrowers to lenders with competitive rates. Skipping the trip to the bank, Lendi technology matches each loan profile submitted to over 1600 home loan offers for online approval, while also offering price guides for over 12 million properties included in their database. They use smart technology, coupled with a human support team to search, choose and complete your home loan digitally. They claim to be, “…changing the way Australians get home loans.”
zipMoney
zipMoney offers an instant, digital loan. The loan is paid back over time: weekly, fortnightly or monthly. zipMoney describes their service as a simple and convenient way to help pay for things without needing the cash or a credit card; limited to participating zipMerchants.
Embracing the Future
Ian Pollari, KPMG Australia’s Head of Banking and Global Co-lead for Fintech said, “When it comes to embracing disruption to the sector, Australian financial institutions are up there with the leading players.”
KPMG reported that the Australian financial services market has been faster than the global community at adapting to fintech trends. According to global surveys, businesses in Australia are ahead of the curve in fintech innovation and preparedness.
In October of 2019 the 6th Annual FinTech Summit will be held in Sydney. The Summit brings together innovative technology companies that are redefining financial services.
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