Australia ranks 6th in the world for fintech according to the Findexable Global fintech
rankings. With more than 800 specialists firms, Australia has one of the world’s most sophisticated financial technology industries. Fintech Australia estimates that the industry has grown from $250 million in 2015 to $4 billion in 2021.
As uncertainty mounts, capital is shifting away from early stage and higher risk to later stage, more certainty but modest growth bets. In Fintech this is no different. 2 years ago the Australian neo bank market looked vibrant with Xinja, Volt, Judo and 86400 charging ahead. Today, with the news that Volt has concluded its banking journey, only Judo is left standing with a couple of others in the RADI queue.
Launched in 2018, the Resricted Authorised Deposit Taking Institutue framework was designed to promote competition in the banking sector by providing a pathway for aspiring ADIs to gain a licence to conduct limited banking business, whilst they prepare to meet the more stringent requirements of a full ADI licence.
With 86400 being mopped up by NAB, and two fails the powers at be at APRA will be running their hands through what hair thay have left about how to drive competition and customer centric innovation in the Australian banking market. As they do investors will sit on the sidelines and wait.
Investors should however be bouyed by the success of the non bank lenders, the likes of Athena and Nano who have shown there is value in great, fast, enjoyable experiences that don’t require a banking license to make money and serve customers. Certainly there are many takingthis route, including Shaype who appear to be able to do well without an ADI and operate on an AFSL quite well, providing BaaS paltfcorms to the likes of CBA on that regime.
War, Pestilence, Climate Change, Supply Chain Disruptions, Economic Model Dsiruption – Theres a long list to keep an eye on