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Australia becomes the second largest fintech market in Asia-Pacific
Australia has risen to become the second largest alternative finance market in the Asia Pacific, according to the findings of a new report. While China continued its global domination of the sector with a massive US$243.28 billion raised in 2016, Australia now contributes 30.42% of the total market in Asia Pacific and stands well ahead of Japan (US$398.45m) and South Korea (US$376.31 million) in terms of market size.
The joint study titled Cultivating Growth: The 2nd Asia Pacific Alternative Finance Industry Report, surveyed over 500 alternative finance companies and was conducted by KPMG, the Cambridge Centre for Alternative Finance, the Tsinghua University Graduate School at Shenzhen and the Australian Centre for Financial Studies
The report also reveals that Australia’s alternative finance market size grew by 53 per cent from 2015 to 2016 and has now reached US$609.6 million. Balance Sheet (business) lending in Australia jumped 80% to US$217.34m in 2016, while Peer-to-peer consumer lending increased by 240% to US$158.23m. The third largest segment was invoice trading, which reported an increase of 16% to US$129.91m.
Commenting on the findings of the report, FinTech Australia CEO Danielle Szetho said
“The story in Australia has truly been about demand, and the small-to-medium enterprise market has driven a lot of the success in the fintech lending sector together with the increasing availability of data. In doing this, the fintech industry has helped these businesses prosper...We hope that this report will mean the Asia-Pacific region and indeed the world will take a closer look at our dynamic and growing fintech industry in this country.”
Another research by KPMG titled Scaling the Fintech Opportunity for Sydney and Australia, found the number of fintech startups in Australia has increased to more than 570 companies from less than 100 in 2014. 60% of these startups are based in Sydney. The two largest sectors by number of fintech companies and capital investment are payments (128 companies) and lending (80 companies). Wealthtech (78 companies) ranks third highest for number of companies.
Finally, a report from Ernst and Young released in June 2017, ranks Australia rank fifth in the world for adoption of new financial services technologies with a 37% consumer adoption rate. The global average rate of adoption is 33%. China has a 69% adoption rate, followed by India, the UK and Brazil.
Australia’s fintech sector continues to grown markedly in recent years. Melbourne will host Australia’s first fintech festival, Intersekt, in October in collaboration with Fintech Australia and Fintech Victoria. The festival aims to be Asia-Pacific’s most influential and exciting fintech event and It is expected to attract over 1,000 participants.