Fintech Australia: “More can be done”
David Ball, secretary of Fintech Australia, chats to finder.com.au about the budget, startups and the future of Australia's fintech scene.
Innovation has been the name of the game in 2016. Since Malcolm Turnbull became Prime Minister in late 2015, the ideas boom has became both a key government agenda item and an avenue for Australia’s burgeoning fintech startup scene to catch up with our international counterparts.
But are we there yet, and more importantly, how prepared are we?
"I see a lot of fintechs that are fighting the same fight," says David Ball, secretary of Fintech Australia, the national association for the fintech industry. "All disconnected, but needing connecting. And they will benefit from being connected."
Speaking about how he became involved in the association, Ball explains how it stemmed from him spending time in the startup community.
"I've had a really good oversight of fintech companies in the country. So late last year I started talking to a few people about wanting to start an association, and it turned out a few other people wanted to start an association, so we thought why don't we just test the waters and see if there's interest.
"We had a few workshops and figured out what our focus should be, and what we should do, and then we had our first meeting in March this year. Since then we've got roughly 70 to 75 fintech startups in the 10 weeks since we've actually been an association. So there's a need for it," he says.
Regulation and reform
The budget 2016 announcement was an important moment for the Australian fintech community. Some key commitments included the establishment of a regulatory sandbox, a review of blockchain technologies for the government and private sector, a discussion paper on double taxing on crypto-currencies such as bitcoin and the reinforcing of a number of initiatives outlined in the Fintech Innovation Statement.
While Ball says the reforms and the budget were welcomed, as it was another commitment to fintech, there's plenty of room for progression.
"The government has shown a lot of its priorities with Turnbull and Morrisson's attendance at Stone & Chalk quite regularly, with the setup of the sandbox and the innovation hub, and there's a lot of good action happening. With the budget itself, I don't know if it really did enough, or if more could be done."
"Pick one or two areas in startup land or tech that you want to focus on and throw everything at them, because we're never going to be world leaders in biotech, healthtech, medtech, fintech, all the techs, right? It's not going to happen. Pick one or two that you know we've got enough of a base for, that you know we've got enough enablers to enable us to succeed, and bet on them."
Data and progressive fintech market segments
The areas of fintech Ball is interested in and hedging his bets on are understandable; it all comes back to data.
"Insurance, insurtech is really interesting. I think there's a lot of room to use tech and big data to reinvent how insurance is done."
When the discussion turned to data, Ball explained how he believed the budget not only missed the mark, but the wrong questions are being asked about the data sharing issue.
"The argument is not currently around who has access to the data, it's about how that data is shared...So I think the argument needs to be framed around how we can make data sharing easier, rather than should we data share because everyone is already data sharing. I can share my data with you through a statement today. It's just about having bank data available through an API and making it more simple."
"I don't think the average person realises the value of their data. If we could enable data to be shared more easily, and we can enable fintechs to compete on a level playing field with banks, I think we're only going to create a better market for the average person to benefit from and be financially better off."
If you can reinvent that, then I think you can challenge everything.
However, real disruption, according to Ball, will come from a fintech company creating a relationship layer.
"Before Twitter and Facebook were around we used to go to news sites to look for the latest stories, and now we're on Twitter and Facebook we come in through the side doors."
"I think the fintechs that are really going to challenge the banks are the ones that can create a relationship layer, a layer with the customer, and be the first place customers go for banking advice. Or, what's happening a lot in Europe is a lot of companies are starting digital banks, or white labelling an ADI – so white labelling banks. If I could have my transaction account, my credit card, and my mortgage on my phone, I don't care what bank it's with."
"I think the most exciting area in fintech is actually reinventing how banks engage with customers, and if you can reinvent that, then I think you can challenge everything."