The Scaling the Fintech Opportunity: for Sydney and Australia report found 59 per cent of industry participants believe the local fintech community is well poised to take the lead in regtech, payments and blockchain.
The report, a joint publication by KPMG, the Committee for Sydney and the NSW Financial Services Knowledge Hub, outlined various key challenges and opportunities for the Australian fintech sector.
“Regtech in particular has been a fast-growth sub-sector which has grown rapidly over the past 12 months,” the report said.
“This is a reflection of the substantial regulatory and cost burden for financial institutions, as well as policy makers and regulators who are supportive of the industry finding more effective means to better manage risk, compliance and transparency for stakeholders.”
Higher consumer demand for speedier and more convenient payment services was impacting the development of the local fintech industry in general, with the payments sub-sector having the “potential to influence and shape citizen behaviour”, according to the report.
Meanwhile, several major banks such as CBA, Westpac, ANZ and others were already trialling blockchain technology as a “potential replacement option for CHESS”, the current register of approved securities holdings.
The report identified Sydney as a major hotspot for fintech activity within Australia, with start-up hubs Stone & Chalk and Tyro Fintech Hub both based in Sydney, as well as the fintech industry associations, along with 59 per cent of Australian fintech companies.
The amount of capital invested in fintech last year rose to US$675 million, up 57.7 per cent from 2014.
However, only 7 per cent of interviewees felt Sydney was a global fintech leader, with London, Silicon Valley and New York “unsurprisingly” taking the titles of top three fintech leaders in the world. Within Asia-Pacific, Singapore was the leader, followed by Sydney and then Hong Kong.
“Whilst Sydney is not seen as a global top three within the Asia region, we are seen as credible and could potentially challenge Singapore,” the report said.