Since the Brexit vote of 2016, the City of London has been rapidly losing its status as the financial technology capital of the world. Fintech startups have been moving their offices to other European cities; in fact, the mayors of Paris, Frankfurt and Amsterdam have been actively courting these companies, but Australia has benefited in a more direct manner.
In the wake of the Brexit referendum, finance industry leaders in London were dismayed when they saw companies packing up and leaving. This situation prompted Mayor Sadiq Khan and city officials to spring into action and come up with ways to retain the financial prestige of London.
On March 12, the Australian Treasury and the British Chancellor of the Exchequer revamped an agreement to establish a “fintech bridge” that will enhance development cooperation between the two nations.
The Fintech Bridge Advantage
Essentially, the UK-Australia fintech bridge seeks to streamline the licensing process in both countries. For instance, an Australian company such as Lendi, which provides a smart mobile platform for individuals seeking home loans, wants to negotiate with British banks that may be interested in adopting this technology. The fintech bridge agreement would take into consideration the licensing that Lendi has already acquired in Australia and would direct British regulators to speed up the required licensing process for this company in the UK.
For UK fintech companies, Australia can be a springboard for reaching the lucrative Asia Pacific market. As another example, say a London startup that specialises in digital payments wants to get a foothold in the Asian market; this fintech firm could partner with an established Australian company such as Airwallex, which has already secured connections in Asia. The fintech bridge would allow the British company to comply with Australian regulators as quickly as possible.
The Current Status and Future of Australian Fintech
Fintech has been growing at a solid pace down under; the talent and clever development efforts of Australian programmers in this sector is evident, but expansion has not been as explosive as fintech leaders would like it to be.
Although the aforementioned fintech bridge is certainly good news for Australian developers, it is also important to capture the personal finance market; to this effect, the Sydney Morning Herald recently mentioned FirstStep, a mobile app that allows Australians to convert their spare change into investments. What is interesting about FirstStep is that it is an Australian company competing directly against Acorns, a New York-based fintech firm that is considered to be the leader in the “spare change investment” sector.
Another fintech company making waves in the personal finance sector is Look Who’s Charging, an app that is proving to be very popular among Australian consumers who are puzzled by their cryptic bank statements. In the case of Look Who’s Charging, the developers have a business model that could easily become global, but they understand that they first need to succeed in capturing the local market.
Another encouraging sign that shows the momentum of the Australian fintech sector is the enthusiasm surrounding the 2018 Finnies, an industry awards show that has the support of the New South Wales government. The most successful fintech companies in Australia will be judged by industry leaders during April, and a gala awards ceremony will take place in June. The award categories range from Excellence in Business to Global Perspective. The support being provided by Jobs for NSW shows that the government believes that this sector has a lot of promise for the Australian economy.
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