Fintech the future

According to Kate Carnell, there have been less than 10 complaints about fintech operators in Australia since March 2016.

“None of these have been fully-fledged complaints,” the small business ombudsman says. “It was more a misunderstanding or even confusion as to the contract they entered.”

Burgeoning industry

There are an estimated 600 fintech operators in Australia. The industry is burgeoning and continues to attract new players, so receiving less than double-digit complaints in 16 months isn’t a bad track record.

“In addition to those 600 there’s probably another 20 to 30 overseas-based fintech companies that are operating here such as PayPal, Stripe and Square, for example,” says Cameron Dart, Australian FinTech chief executive and founder.

“When we first started Australian FinTech back in 2015, we estimated there to be around 100 to 150 Australian fintech companies. We were very wrong. There were about 300 fintech companies back in 2015, which grew to around 450 in total during 2016 and now we have just tipped over 600.

“So the growth rate is quite phenomenal and there’s more to come. We know of at least another 20 to 30 that are yet to launch.”

Dart also states that in the past two years 20 fintech companies have ‘disappeared’, though provides no explanation of what has happened to them.

Speeding up

Dart says he has stories of small businesses submitting online loans to fintech providers of up to $10,000 on the Tuesday and the money being in their account by the Friday.

“I don’t know of any banks that could work that quickly,” he says. “Fintech companies speed up the ease of applying for, and obtaining, money, which can be very important at certain times.”

Neil Slonim from thebankdoctor.org says the quick service is a boon to SMEs.

“One of the most attractive features of fintech lending is the absence of the need for property as security,” he says. “Many small businesses owners, particularly younger people starting out with their new business, simply do not have property they can offer as security. Some have property but with limited equity, whilst others are simply not prepared to put a family home at risk.”

Slonim has more than 30 years’ experience in senior leadership positions in business banking, corporate banking and credit within the National Australia Bank group.

“Fintech companies speed up the ease of applying for, and obtaining, money which can be very important at certain times.”

Cameron Dart

“Fintech lenders can provide quick access to funds to those small businesses that don’t want to deal with the banks or the banks don’t want to deal with,” he says.

Fintech lenders can be well suited to small businesses which don’t or can’t offer property as security, may not have been in business for a long time or may have a blemished credit history.”

Rapid takeup

An EY FinTech Adoption Index 2017 report, ‘The rapid emergence of FinTech’ released in late June 2017, reveals that “50 per cent of consumers use FinTech money transfer and payments services and 65 per cent anticipate doing so in the future”.

The report also states that “33 per cent is the average FinTech adoption globally, up from 16 per cent in 2015”. The survey was based on more than 22,000 online interviews across 20 markets with further information revealing that “FinTech has achieved initial mass adoption in most markets, which will continue to gain momentum with new services and new players driving adoption”.

“It’s still very early days for fintech in Australia, with the industry here a good five or six years behind the UK and the US,” says Daniel Foggo, chief executive of RateSetter.

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Source: Fintech the future – Louis White, The Sydney Morning Herald