The future of Australian Fintech is brighter than it’s ever been – here’s why.

• Cryptocurrency will become a normal part of life.
• Experienced Fintech entrepreneurs will take newcomers under their wings.
• We’ll see a greater shift towards green initiatives in Fintech.
• We’ll have better access to and more interest in complicated financial tools and instruments.

These are the main predictions that our expert panel of industry leaders envisioned for the future of Fintech in Australia at our event hosted by Stone & Chalk Group CEO, Michael Bromley, in Sydney this week.

Stone & Chalk is the largest innovation community nationally, and in this article, we are excited to take a deep dive into Fintech.

The Fintech journey has been monumental and extremely fast-moving here in Australia, heavily disrupting traditional finance.

However, that’s not to say that Fintech is looking to replace traditional finance altogether.

“Fintech’s aren’t necessarily standing up against the incumbents. We’re actually now enabling the incumbents, so we’re working together to produce better consumer outcomes,” says Vanessa Fletcher, CMO of Nano Digital Home Loans.

Fred Schebesta, Founder of Finder.com.au, takes it one step further, suggesting that our banks were the first Fintech generation.

“Banks in Australia actually did a great job. They built apps, they built stock trading, and I just think that we should honour that because those rails and that idea was actually pioneered by them.”

When considering the rise of Fintech over the last 10-15 years, Apurva Chiranewala, General Manager of Block Earner, believes that it was the GFC that created the initial fork in the road, where a choice then had to be made about whether we continue to settle with tradition or start to look for a better way.

As for why Australia seems to punch so far above its weight in the Fintech space, Apurva suggests that “we are an affluent market. This does give us a little bit more tolerance to risk… when you have safety nets built in, you can be more entrepreneurial in a rich market.”

This, coupled with good levels of government support, has allowed for greater levels of innovation and progression in the Australian Fintech industry.

The next 10-15 years are looking particularly strong for Australian Fintech.

“In the last 5 years, we’ve more than doubled the amount of Fintechs in Australia. I think it’s now about 850 contributing to $4 billion in revenue – and that’s growing. What that shows us is that there is still plenty of consumer problems that need to be addressed and plenty of disruption that’s still to come,” says Vanessa.

Meanwhile, Fred predicts, “I think crypto is going to be normal in ten years’ time. Like, we don’t talk about POP3, we don’t talk about TCPIP, we don’t talk about WWW anymore, it’s just the internet and I think crypto will be the same thing.

A lot of these rails, a lot of these things are going to get sorted out. There are a lot of problems that are being experienced, but if you look at the problems, they’re the exact same problems that happened with the traditional financial system.”

As these digital currencies do become commonplace, Fred believes that they will help to reduce transaction costs and drastically speed up our economy, both here in Australia and on a global scale.

Apurva agrees with this sentiment, especially as more regulations and trust is built into the system.

He adds, “we often get asked, ‘Is blockchain the future of finance?’. Well, it’s part of the future of finance, but I don’t think it’s going to destroy the banks. I think banks will have more acceptance towards it. There will be a share that will be taken, there will be a space that it will create for itself, and that will create more options for everyone who’s sort of been sitting out of the financial revolution.”

Moving away from cryptocurrency, Fred also anticipates that the current Fintech entrepreneurs will take on a much greater responsibility than we’ve ever seen before to coach and guide the new generation of entrepreneurs coming through.

This will allow the industry to take greater risks and truly swing for the fences, bringing exciting new opportunities and further innovation.

Vanessa adds to this, explaining that “Australia has embraced Fintech, but we’ve not embraced climate change. I used to work for a youth brand, and I know how much climate matters to the next generation. So, if the Fintech leaders of today are nurturing the next generations, then I expect that it won’t be long until we start to see that green movement come to life.”

As a final prediction, Apurva points out that over the last couple of years, we’ve started to see what he calls ‘increased participation in complex finance’, and this will only continue to grow.

“Up until recently, there was a higher degree of faith in financial institutions and systems, and I think in the last couple of years, the Superheroes and the Robinhoods of the world, they’ve opened this portal for the average user to be able to dabble in financial instruments that up until recently, they had an arm’s length distance from.

“In the next ten years or so, you’re going to see more and more people in a macro way participate more in finance, and there will be tools, startups and Fintechs that are going to play a big role in doing that.”

Essentially, more people are going to start to do their own research and educate themselves about their own money and gain a better understanding of the financial instruments around them.

While there will always be risks around Fintech, with the right attitude, they can be managed.

Vanessa explains that there has been this ‘growth at any cost’ mindset around Fintech in recent years, however, this has caused several issues, and it cannot continue if we want to move forward.

“Profitability is important, efficiency is important, and revenue chasing at any cost is just not okay. Understanding your strategy, understanding that profitability matters and understanding that it’s people that get you there is key to making sure that we survive.”

As for the problem of the big banks buying all the Fintech startups to eliminate their competition, Vanessa suggests that working with the banks, rather than against them, is the best way to move forward together.

Apurva takes a slightly different approach, joking that, “Fintech can keep producing and let the banks keep eating them, to the point where they can’t eat anymore, and then Fintech will win.”

Whatever the future may hold for Fintech, we at Stone & Chalk are beyond excited to be a part of it, and we couldn’t be more thrilled to play such a significant role in helping so many growing Fintech startups succeed.

About Stone & Chalk Group

Stone & Chalk Group is Australia’s home for emerging technology innovation. Our world-class expertise and networks, provide unrivalled knowledge, access to capital, infrastructure and guidance that's driving emerging tech innovation for positive impact.

For more information, visit: www.stoneandchalk.com.au