16 minute read 20 Oct. 2021

Australian fintech sector creating jobs and raising capital, with sights set on overseas markets

May Lam

EY Oceania Fintech Leader and Asia-Pacific Payments Leader, EY Financial Services

Entrepreneurial and people leader thriving a connected sustainable world by fueling payments and fintech innovation. Mother of two wonderful children, wife, runner and pianist.

Malia Forner

EY Australia Government & Investment Incentives Partner, Oceania Fintech Leader and Entrepreneurship Program Leader

Trusted Government & Investment Incentives specialist. Board advisor. USA - NZ transplant in Australia since 2008. Dedicated to entrepreneurship, diversity, tech & innovation. Mum to two active sons.

16 minute read 20 Oct. 2021

The sixth EY FinTech Australia Census finds the sector a standout hero preparing for even greater international expansion.

In brief
  • Australia’s fintech sector has continued to mature rapidly throughout the COVID-19 pandemic, with record investor capital raised and increasing numbers of start-ups moving to post-profit.
  • The digital acceleration caused by the pandemic is driving fintech innovation, leading to strong revenue generation from overseas markets and new jobs.
  • Government incentives, industry collaboration, global talent acquisition and increased diversity will be critical to sustaining the sector’s global growth trajectory.
This year’s Census finds Australia’s dynamic fintech industry competitive on the global stage and poised to support our nation’s economic recovery – as the thousands of new positions on the FinTech Australia jobs board attest. With more concerted and coordinated support, the sector’s trajectory would be unstoppable
Rebecca Schot-Guppy, CEO FinTech Australia

FinTech Australia has continued its successful collaboration with EY Australia to help deliver this important piece of research. The Census remains the only detailed, industry-backed analysis of the Australian fintech industry, offering fine-grain detail about the industry’s increased maturity. Read on for a summary of its results.

In contrast with Australia’s lagging R&D commercialisation record against international comparisons, fintechs are beating an accelerated path to market and turning on revenue streams quickly – attracting capital as they go.

Despite a wave of new entrants joining the sector in the last year, this year’s Census found industry employment continuing to increase, with a median of 21 full-time employees, up from a median of 10 full-time employees in 2020. Where fintechs are three years or older, 88% are post-revenue. Following in their wake, 81% of companies two years or older are also post-revenue.  As a result, the number of paying customers has reached a new high among post-revenue fintechs, with 41% reporting more than 500 customers

EY AU Funding rounds increased

The Census found fintech entrepreneurship rising in the wake of the pandemic. The overall number of post-revenue participating fintechs is 70%, down from 78% in 2020, with a key reason being the uptick in new younger fintech start-ups entering the market, a positive sign of the growing size – not only the slice – of the pie.

The 2021 Census results show strong overall growth in capital raising, with lower reliance on founder funding and higher amounts raised. 2021 saw a dramatic increase in fintechs whose capital raising expectations were met or exceeded (82% versus 57% in 2020) – particularly high amongst those innovating in payments, wallets and supply chain. In a time of great uncertainty, the private capital investor sector provided much needed funding and support to the Australian fintech ecosystem.

Importantly, 40% of fintechs are generating revenue from overseas, and 18% are getting more than half their revenue from international customers. As a result of generating overseas revenue, 88% added new jobs to support this growth.

The value of technology as a national export has never been clearer. Australian deals and capital raising are now rating on the global scale. Four in five (80%) survey respondents say Australian fintechs are internationally competitive (versus 64% in 2019). Local fintechs say their biggest competitors are other fintechs in Australia or overseas.


of Australina fintechs has raised more than $100m

The perfect storm to drive fintech innovation

In the last 18 months, the addressable market for fintech has grown larger than ever as the pandemic has accelerated the consumer relationship with transacting online and, in turn, the need for companies to embrace digital models. Today, every consumer-facing business needs a digital payment capability as waves of lockdowns have taken all generations of consumers online. We’ve also seen greater public and private sector collaboration on solutions to pandemic challenges.

With a big pull on the demand side, and the pandemic responses keeping banks focused on their core, fintechs have spread their innovation wings.  As banks realise the urgency of investing in or partnering with fintechs, the proportion of fintechs indicating they have encountered an issue with banks and other institutions continues to decline. Fintechs reporting an improved relationship with incumbents talk about better partnerships, more access, introductions to the ‘right people’ and banks being more open to new ideas.

The sector is continuing to support the uptake of open banking. Only 7% of fintechs are already Accredited Data Recipients (ADRs), but a further 25% intend to follow suit – and many more plan on connecting via an intermediary. This appetite is supported by the recently announced third amendments to the Customer Data Right (CDR) rules. The new rules will accelerate increased business participation and empower consumers to get greater value from their data through a broader range of offerings. 

Respondents reported already seeing the benefits of CDR in providing a fast and frictionless customer onboarding experience. Open banking pioneers interviewed see great potential in using CDR as a digital identity and to support new ways of risk profiling over traditional credit scoring in the future. 

CDR is about ethical data sharing and consumers having control of their data. The right mindset shift by both data recipients and data holders will help the market to see CDR as a long term opportunity for both customer engagement and acquisition.
Jill Berry
CEO, Adatree

In 2021, payments, wallets and supply chain continue to be the most common type of fintech (43%), followed by lending (30%). Payments fintechs have had significant success in raising capital, with 18% raising more than $100m in their last round of funding. Of fintechs providing payment capabilities as part of their service offerings, four in five (78%) are using service providers for their payment offerings; and 84% report that direct connection to the New Payments Platform (NPP) would be beneficial to their organisation. While 80% report that alternate payments, like buy now pay later (BNPL) and loyalty capabilities, are more applicable to payment options, only 26% of payment fintechs leverage loyalty capabilities. Loyalty paytech innovation is expected to be a future growth area.

Rapid growth in paytech will support accelerated industry convergence, especially now banks are facing increased competition from huge, experienced omnichannel players and other non-financial entrants with large customer bases, including retailers, telcos and utilities. 

Ubiquitous payments will enable industry convergence. As it grows, paytech has a duty to support financial inclusion, equity and sustainability while helping to rebuild the economy.
May Lam
EY Oceania Fintech Leader and Asia-Pacific Payments Leader, EY Financial Services

Fintech growth was also assisted by the 2020 Federal Budget, which brought welcome developments to the Australian R&D tax incentive (RDTI) program, removing much of the lingering uncertainty around the future of the program and abandoning the previously proposed cuts. Certainty was also strengthened by landmark court cases around how the RDTI legislation should be interpreted and new guidance material.

It is pleasing to see the halt to tinkering with the Australian RDTI and eligibility certainty strengthened by landmark court cases. Now businesses can start planning their innovation investment with certainty
Malia Forner
Oceania Government Incentives, Tax Partner, EY

How can the sector continue to grow beyond Australia?

Fintechs and technological innovation will be vital to help rebuild our economy. To sustain the improving maturity metrics recorded by the 2021 Census, all key pillars (government, regulators, institutions, investors and educators) must continue working collaboratively to foster onshore growth and enable greater international expansion.

In terms of government’s contribution, 80% of survey respondents say making the RDTI more accessible helps improve sustainability and growth of their business. Despite improved certainty around the RDTI, more than two-thirds (68%) of fintechs still perceive the Australian Government to be less supportive compared with other jurisdictions.

Notably, New Zealand, which has recently doubled down on its R&D incentives, has jumped to the top of the list of fintech markets for expansion for the first time ever. Increased scrutiny on RDTI claims and high-profile court cases where claims were challenged have left some intech founders rattled. 

To sustain its momentum, the sector will need:

  • World-class government incentives for businesses and investors

    Government incentives remain a key lever and high priority for a sector where founders are constantly looking for capital. More than half (57%) of our survey respondents who have tried to raise capital identified they are still struggling to find the right investors. The sector is well aware of global counterparts, like Singapore and NZ, where launchpads for start-ups are being created in a structured way to attract innovation and jobs. Almost three-quarters (72%) strongly support increased access and grant assistance to a greater diversity of overseas launchpads.

    Although the Australian RDTI program is globally competitive in its rates of benefit and refundability, it has previously been plagued with change and uncertainty, including multiple reviews, rate changes, senate enquiries, amendment bills and legislative changes.

    Matching tax and investment incentives available in other countries to support R&D, innovation and jobs growth has never been more important. Australian entrepreneurs and private capital investors need to receive the same support and regulatory administration ease as global counterparts if they are to bring new ideas to market and build high-growth and high-return companies that support future economic growth.

    In the wake of the pandemic, the Government has introduced incentives, stimulus and cash grants to sustain and attract investment. But, beyond the pandemic crisis period, Government must continue to shape policy and programs that support founders and attract private capital investment at every stage of a company’s lifecycle. Local entrepreneur and investor confidence hinges on maintaining stable, globally competitive regulatory, tax and incentive frameworks, where the sector has greater certainty over administration and access.


    2 in 3

    fintech considering expanding overseas in the next three years say support understanding the regulatory environment (69%) , and government support and funding (61%) would be most valued

    Funding levels in Australia have continued to increase, although more can be done to be on par with the world’s leading fintech ecosystems. Recognising that many Early Stage Innovation Companies (ESICs) face stiff competition for investor capital, just under one third (30%) of Census participants agree that further improving tax incentives to investors who acquire shares directly from fintech start-ups would allow greater capital to flow.

    It will be important to provide enhancements and certainty on ESIC incentives, the framework for Early Stage Venture Capital Limited Partnership (ESVCLP) and Venture Capital Limited Partnership (VCLP) programs, and make them globally competitive to attract  investments into Australian fintechs and other emerging sectors of the economy.

    Over one quarter (26%) of Census participants believe changes to ESVCLPs would allow greater capital flow into the fintech sector. In Australia, the law has not kept pace with the evolving definition of financial technology and where it converges with mainstream financial services businesses. Under current legal interpretation, restrictions are placed on investments made by ESVCLPs and VCLPs into fintech companies. The Government is currently reviewing these tax incentives to ensure current arrangements are fit-for-purpose and support genuine early stage Australian start-ups.

    Although our total investment in R&D as a country is in decline, government expenditure on R&D as a percentage of Gross Domestic Product (GDP) is actually slightly higher than that of the OECD average. In other words, it is actually business investment in R&D that is lagging behind other comparable countries.

    While there may be several influences, R&D investment from business requires systemic stability and innovation policy consistency. Significant R&D investment often takes many years to achieve commercial outcomes and requires a long-term view, backed by a stable and predictable policy and incentive framework. Now is a pivotal time to support the structural modernisation of our economy and to grow our nation’s investment into innovation through world-class business and investor incentives, serving to attract talent and capital. 

    Current incentives and regulation administration, consistent with intent, could also be optimised with other tax and financial measures designed to give cash or allow businesses to retain more cash. These could include targeted financial services technology based grants and differentiated levels of support based on maturity, with tailored cash incentives and grants for established fintechs looking to go global, compared with incubation and commercialisation support for start-ups and collaboration projects.

    FinTech Australia has done an amazing job in providing a proper collaboration platform to be the constructive voice for fintechs in the government and regulatory landscape.
    Lachlan Heussler
    Chief Strategy Officer, InDebted
  • Growing beyond Australia strategically

    As a result of strong revenue generation from overseas markets in the last 12 months, 88% of fintechs have created new jobs within their business. Looking forward, 72% of fintechs plan on entering or expanding in an overseas market in the coming three years, and 60% have plans for overseas expansion in the coming 12 months. Whether in the next three years or 12 months, the top markets for expansion remain the same – New Zealand, UK, USA, Singapore, Canada and Indonesia.

    The USA and UK have become less attractive markets for expansion this year, with fintechs looking closer to home. This is the first year New Zealand has surpassed the UK and US as the most desirable market for expansion. Close to half (47%) of those who intend to go into an overseas market in the coming year indicate they plan on going into New Zealand. Following this, one in three plan on entering or expanding to the United States (34%) and/or the United Kingdom (33%).

    1 in 8 (12%) organisations have received an Export Markets Development Grant in the past and 15% of organisations plan to apply for the grant. Respondents also indicated that international expansion would be best supported by help to ‘understand the regulatory landscape’ (69%), ‘government support and funding’ (61%) and assistance in ‘developing customer networks’ (51%).

    Two vectors of support will be critical to drive ongoing fintech innovation, strong revenue generation from overseas markets and new jobs creation:

    • The Australian Government’s 2020 Digital Business Plan to Drive Australia’s Economic Recovery, which includes $9.6 million over four years to support Australian fintech businesses to access international markets and attract international investment
    • Austrade and FinTech Australia’s co-delivery of trade services to eligible exporters to increase international business outcomes for Australian fintech companies
  • Accelerated incumbent/fintech collaboration

    In 2021, innovation is thriving in the fintech sector, aided by greater collaboration between incumbent institutions and start-ups to address challenges at speed and capitalise on emerging opportunities and changing customer needs.

    But, with competition from big tech, large overseas players and non-traditional sectors taking advantage of innovations in embedded finance, fintechs and incumbents have no choice but to collaborate further and faster. Incumbents and industry need the agility of fintechs to compete; fintechs need the incumbent customer base to scale. There is room for improvement in these relationships with two in three fintechs (67%) viewing their relationship with banks and other financial institutions as unchanged and, only 17% seeing an improvement in those relationships.

    There are early signs that collaboration and partnership through joint ventures, investments or transactions are the best way for incumbents and fintechs to co-exist and focus on customer needs and outcomes – rather than disrupting each other. That said, more support is needed to provide fintechs with deeper access to regulated products, services and infrastructure to allow them to grow and scale to a size that makes sense for them to work with incumbents.

    Seeing more collaboration between fintechs and incumbents is a promising indicator of sector maturity. It is a healthy growth path where a new value proposition can be created to solve real customer problems rather than organic growth alone.
    Cathie Armour
    Commissioner, Australian Securities and Investments Commission
  • Border talent pathways

    Border closures have significantly impacted Australia’s skilled migration levels, creating challenges for many organisations in the tech ecosystem. 2 in 3 (66%) fintechs are finding it more challenging to attract qualified or suitable talent in Australia in the past 18 months and 78% want easier access to skilled migration visas. Mirroring previous Census findings, 62% of respondents say ‘engineering /software’ talent is proving the most difficult to attract. Many fintechs are also finding ‘product management’ (31%) and ‘data engineering/data science’ (30%) skills elusive.

    It’s clear that, in the post-pandemic rebound race, skilled visa programs and employee retention schemes like wage subsidies would help all start-ups to grow and attract skilled talent.

    The biggest challenge of growing global is attracting the right talent and embedding it into one culture.
    Ben Williamson
    CEO, Fresh Equities

    The fintech industry itself – and its financiers – also need to continue to move the needle on diversity. Of our respondents, almost a third (30%) could not provide an estimate of their diversity profile. Of those who could, an average of 25% of employees are from a diverse background. Overall, only 55% of organisations have any employees from a culturally and linguistically diverse (CALD) or Aboriginal and Torres Strait Islander (ATSI) background.

    This year’s Census found more female employees (35%), compared to just 22% reported in the inaugural Fintech Census in 2016. Over a quarter (26%) of leadership positions are occupied by women, and the proportion of female founders remains relatively consistent with the overall industry. Despite remaining in the minority, female founders are distinguishing themselves, receiving industry accolades and becoming thought leaders for the sector.


    of fintechs have a female founder

    To build up gender equity in the sector, we should continue to amplify a supportive ecosystem for women-led and employed tech start-ups. Do we need more female private capital investors to help fund diverse fintechs and other start-ups? With entrepreneurs telling us that talent is a key obstacle to scaling their business, can fast tracked skilled visas help to bring in complementary talent for these leaders? These systemic issues span beyond the fintech sector but are interconnected and interdependent.

    Several factors have been hypothesised as key barriers to gender equity within the industry:

    • Fintech founders tend to transition from a financial service background, where there is markedly stronger participation from males.
    • Gender pay gaps widen as females progress in their career, which can result in smaller savings and capital for creating the necessary runway for start-ups.
    • There are typically greater expectations for females to take care of family responsibilities, highlighted during the pandemic, which can reduce their availability for work in general.
    • Females are believed to be more risk-averse than males which makes it less likely for them to invest in start-ups or other capital ventures.

    As we reflect on the progress of gender parity, we first need to create an environment that increases the pool of female representation in financial services and technology industries. Simply placing women at the top of a company is not enough to fix these problems. These industries need more advocates and allies for women to support closing the pay gap, introducing carer-friendly employment policies and providing inclusive training programs.

Time to build on strong foundations

Australia’s fintech industry is vital to support economic and jobs growth. Sustaining our world-class financial services ecosystem is an opportunity and challenge Australia must win – and we have a great foundation.

The fintech market is enjoying increased capital availability from a more sophisticated venture and private investor community. The sector’s speed to commercialisation and the number of deals and IPOs in the past 12 months – including the landmark Afterpay sale to Square – have given investors greater confidence of returns.

Now we need to sustain the sector’s growth trajectory with a concerted effort between government, regulators, incumbents, private business and educators. To retain relevance and rising star status on the global fintech stage and keep our innovation and talent onshore, we must build meaningful and globally competitive growth pathways for Australia’s start-up sector. Incentives, stimulus and cash grants to sustain and attract investment, better-coordinated collaboration and strong moves to drive industry diversity will all help to build a world-class fintech export market and attract the best international tech companies to Australia.

Thank you to everyone who contributed to the 2021 Fintech Census, helping to build this vital dataset for our rapidly maturing ecosystem.


This years' Census had the largest number of participants and captured key data, trends and themes from the industry, with a focus on raising capital, local and global growth, regulation and government support and the emergence of infrastructure across open banking and payments.

About this article

May Lam

EY Oceania Fintech Leader and Asia-Pacific Payments Leader, EY Financial Services

Entrepreneurial and people leader thriving a connected sustainable world by fueling payments and fintech innovation. Mother of two wonderful children, wife, runner and pianist.

Malia Forner

EY Australia Government & Investment Incentives Partner, Oceania Fintech Leader and Entrepreneurship Program Leader

Trusted Government & Investment Incentives specialist. Board advisor. USA - NZ transplant in Australia since 2008. Dedicated to entrepreneurship, diversity, tech & innovation. Mum to two active sons.

FinTech Australia has continued its successful collaboration with EY Australia to help deliver this important piece of research. The Census remains the only detailed analysis of the Australian fintech industry.