There are three obstacles that are stopping the Australian FinTech industry from reaching its potential. But, with the right expertise, they can be removed.
Sydney-based FinTech expert Chen Lahav has been leading technology and professionals in FinTech innovation globally for two decades. A respected industry commentator, Lahav cites a trio of obstacles to Australia rising to the occasion and staking its claim as a major player on world markets.
Reflecting on pivotal occasions where he anticipated the ‘writing on the wall’ in the FinTech space, accurately predicting an outcome, he says it’s up to the government to ensure that the local FinTech industry is empowered to fully embrace its capabilities by ensuring it has access to international talent.
“I anticipated that the introduction of Consumer Data Right (CDR) regulation and open banking will create opportunities for innovative companies to provide CDR and open banking as a service,” he says.
“It’s lovely to see the work being done in this domain by Frollo and Adatree, however, I really believe that more innovation is required and available.”
Australian markets on the edge of greatness
Reflecting on the current state of the Australian FinTech landscape, Lahav notes that the industry sustaining itself through the global crisis caused by COVID-19 could be attributed to the relatively minimal impact of COVID-19 on the Australian economy, the soaring market demand, and the increasing available funding by private ventures and IPO in the ASX
“Strong forces are shaping it every day, sometimes in unforeseen directions,” he explains.
“Xinja’s decision to return its banking license, for example, was very surprising and was followed by several acquisitions of Xinja’s competitors by the ‘Big Four’ banks, which raises the question: What is considered a ‘Neo Bank’, and is there one in Australia today?”
Thanks in part to acquisitions, the big BNPL providers Zip and AfterPay continue to expand internationally, establishing their global presence, an evolution Lahav sees as a bellwether for greater things in the local marketplace, adding that “prior to COVID-19, Australia was the fifth largest FinTech hub. If the government acts quickly with regards to talent, Australia will move one or two places up.”
Potential roadblocks, and how to overcome them
This is not to say that the market and industry are immune to challenges or the errors that cause them. From his perspective, Lahav believes that talent, regulation, and M&A are the most pressing challenges, threatening to slow down the growth and expansion of the Australian FinTech industry.
When it comes to talent, he sees the global pandemic and resulting international border closures as a substantial obstacle.
“Even the ‘Big Four’ banks have not been able to bring in talent since February 2020, and to make things worse, many IT professionals on temp skill visas are being forced to leave Australia instead of being offered visa extensions or a quick path to permanent residency.”