In early 2016 the federal government announced the formation of a new FinTech Advisory Group to advise the Federal Treasurer on significant issues pertaining to Australia’s FinTech industry. Examples of these issues include identifying areas of potential future reform and ensuring the specific priorities of the industry are considered in the implementation of government policies.
WealthBricks sat down with Nerida Caesar, a FinTech Advisory Group member and Group Managing Director, Australia & New Zealand of Veda, a data analytics company, to discuss her views on Australia’s FinTech industry.
What do you consider to be the top three priorities of the FinTech Industry?
There is much to be excited about FinTech for enterprises that rely heavily on the collection, application and interpretation of data. There are new ways of capturing, servicing and interacting with customers and new ways of managing risk.
The top 3 priorities are:
- The development of new ways to service customer needs for financial products via digital technology and digital thinking
- Expansion of customer base by cross border selling – access to customers in different jurisdictions
- Creation of an eco-system for FinTechs that allows them to be nimble and viable
What do you see are the main economic opportunities for Australia in having a growing FinTech sector?
FinTech thinking stimulates new ways of doing business. In financial services we are seeing automated risk-based pricing for credit, based on a credit score. We are seeing peer to peer lending. We are seeing a revolution in the way customers are assessed and verified, as the race to create competitive advantage through offering the most seamless customer experience heats up.
What competitive advantage does Australia have to allow it to become a world leader in FinTech?
Due to its geographic location, Australia is perfectly placed to be Asia’s financial services hub. In addition, a sophisticated banking system and a strong regulatory and legal environment make Australia ideal to become a world leader in FinTech.
What do you see as the main obstacles in FinTech start-ups flourishing in Australia?
Obstacles include access to risk capital, the tax environment, high labour costs and the scarcity of qualified engineering resources.
KPMG’s 2014 report looking at the FinTech opportunities for Sydney identified the right recipe for FinTech success: funding, talent, a robust financial services industry, Government and regulatory support, business backing and collaboration. It’s having the right eco-system that will allow FinTech to flourish in Australia.
What interests you personally about FinTech?
There is no doubt that developed economies, including Australia, are in the midst of an economic transformation driven by a digital technology revolution.
The digital technology age we live in will transform businesses and the economy as deeply as the industrial revolution did two centuries ago.
The technology revolution we are living is characterised by the mass connectivity of businesses and consumers, the generation of immense amounts of data and a step change in how we solve business and market problems.
The government expects fintech to have an important role to play in Australia’s innovation future – it will be interesting to monitor the developments.