8 minute read 2 Nov. 2022

Why Australian fintechs are sufficiently robust to weather the coming storm

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.

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.

8 minute read 2 Nov. 2022

The seventh EY FinTech Australia Census finds the sector still in growth mode but facing increasingly fragile market conditions.

In brief
  • Australia’s fintech sector continues to mature, with more paying customers and increasing numbers of post-profit and post-revenue enterprises.
  • But with cracks appearing in the capital raising landscape, fintechs need longer cash-flow runways and convincing sustainable growth narratives to secure funding. 
  • To keep this important growth sector on track, the ecosystem as a whole must rally, with government assistance needed to sustain growth and attract investors.
This year’s Census signals increasing challenges for Australia’s fintech industry, as access to capital and talent tightens. Collaboration across the ecosystem and targeted government support will be needed to keep the sector on its growth trajectory.
Rehan D'Almeida, General Manager, FinTech Australia

FinTech Australia has continued its successful collaboration with EY Australia to 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.

Despite a challenging and uncertain economic environment, the last 12 months saw Australia’s fintech sector continuing to demonstrate steady growth and increased maturity.

Fintechs are here to stay. This year’s Census found four-in-five (78%) of the fintechs surveyed at post-revenue, up from 70% in 2021. Not surprisingly, those most likely to be post-revenue are the larger and more established fintechs. Nine-in-ten (88%) fintechs in business for 3+ years, and 83% in business for 2+ years, are in the post-revenue stage. 


of Australian fintechs are post-revenue

The number of paying customers continues to increase year-on-year among post-revenue fintechs, with 45% reporting >500 customers, up from 41% in 2021.

EY AU Funding rounds increased

The percentage of fintechs post-profit remains steady at elevated levels: 30% in 2022 compared to 29% in 2021 and 20% in 2020. This is a positive sign that the sector is using its nimble digital infrastructure to maintain margins in the face of surging costs.

Despite headwinds, we are seeing more fintechs post-revenue and fintech profitability being maintained. With greater investor focus on profitability as opposed to 2021’s ‘growth at all costs’ approach, this bodes well for Australia’s fintech sector weathering future storms. Australia’s largest fintech segments continue to be payments, wallets and supply chain, followed by lending, business tools, wealth and investment, and data analytics/information management.

That said, the percentage of fintechs involved in wealth and investment, while still relatively small, increased by seven percentage points in the last year (24% versus 17% in 2021). As robo-advice, micro-investing, crypto, CDR and ESG investing take off, we expect to see wealthtech increasingly deployed in the hands of Australian financial advisors and consumers alike. Notably, wealthtech accounted for 5 of the 29 Australian fintech seed deals in the first half of fiscal 2022 .

Wealthtech growth is happening around the world, especially in Europe. After the pandemic, people are keen to invest for greater financial stability and are demanding greater control of how their money is put to work. Wealthtech makes investing consumer-friendly, simple and engaging. We expect it to be a rising force in Australia in the next 12 months.
May Lam
EY Oceania Fintech Leader

Warning signs in the capital raising environment 

Capital raising in the sector continues to grow steadily as investors increasingly understand the importance and potential of fintechs, and the sector moves towards more mature and alternative funding strategies. However, the funding landscape is shifting.

In 2021, access to funding grew as fiscal and monetary stimulus drove demand and provided liquidity to the market. Investors knew that with the pandemic boosting business digitisation and pushing more consumers to use digital solutions, the environment was primed for fintech innovation.

This year, qualitative interviews with fintech founders and investors suggest investors are re-evaluating the market and proving more hesitant to provide, especially larger, rounds of funding. Extended due diligence, fall in valuations and increased demand for positive cash-flows combined with reduced availability of investor capital is limiting some fintech expansion plans.

Capital raising has not grown since last year, with 45% of respondents having raised more than $10m to date, in line with 44% in 2021. Payments, wallets and supply chain fintechs were the most successful, with 21% of this segment raising more than $100m, compared to the 13% sector average. Outside of founder funding (54%), capital raising was largely from venture capitalists (33%), angel investors (32%) and strategic corporate investors (29%).

However, reliance on founder funding is waning and the interest in and use of alternative funding, including government grants, is increasing. Half of the fintechs (54%) surveyed reported private funding from founders, compared to up to 75% in earlier surveys. One-in-five cite government grants (including the R&D tax incentive) as a source of funding, highlighting the importance of the R&D tax incentive as part of the funding for growth equation.

In the last 12 months, a rising number of fintechs (29% versus 18% in 2021) failed to meet their capital raising expectations. Also, the proportion exceeding their capital raising requirements decreased slightly (17% versus 21% in 2021). Qualitative interviews revealed an increasingly challenging landscape for newer startups to raise capital to grow quickly. However, early stage fintechs are still being rewarded if they can showcase profitable growth. Fintechs with longer runways and a clear path to profit are also continuing to attract funding.

Fintech Census 2022 Infographic 3840 x 2560 capital

As expected, business valuations at the last round of funding vary across the industry. The majority (64%) were valued at $50m or less, 29% between $50.1m to $1b and 7% at more than $1b. Some in the sector believe the valuation bubble has already or is about to burst, setting the stage for a dramatic uptick in mergers and acquisitions (M&A) or initial public offerings (IPOs), and a rapid round of industry consolidation. 

EY’s Global Q3 IPO Trends report supports this view. In the 2022 calendar year to date, Asia-Pacific has registered year-on-year declines of 25% by deal number and 22% by deal size. M&A activity remains strong in the background as companies evaluate their options for 2023, anticipating more favourable market conditions. Providing that market uncertainties and volatility subside, the launch of long-awaited blockbuster IPOs, together with improved after-market returns, may attract an M&A uptick despite lower valuations compared to the highs of 2021.

The stage is set for greater opportunities for innovation in alternative funding and incentives beyond venture capital or traditional forms of finance. This will create markets and consumers for new and established financial services enterprises with alternative and non-dilutive financial services solutions. There is still capital for investment, but it is being deployed differently.
Malia Forner
EY Government & Investment Incentives Partner and Oceania Start-up and Entrepreneurship Leader, EY Private

Confidence falls on international expansion plans

Compared to last year, although the percentage of local fintechs generating revenue from overseas remained steady (40%), local confidence waned around Australia’s competitiveness in the global fintech arena. The percentage of survey respondents who believe Australian fintechs are internationally competitive fell to 69% from 80% in 2021, putting the sector’s confidence almost back to 2019 levels. Confidence that Australian fintechs can win against international fintechs also fell to 57% from 67% in 2021.

However, this local perception contrasts with anecdotal evidence from overseas investors and fintechs, for whom Australia’s fintech sector and market opportunity remains highly attractive and competitive. From an overseas investor and global fintech landscape perspective, Australia has a deep talent pool, sophisticated, innovative financial and consumer markets, and an evolving regulatory environment, making it comparatively a great place to develop innovative fintech businesses with the potential for global scale.

Census data tells us that fintechs are natural exporters, creating products and solutions for global markets from day one. According to this year’s data, of Australian fintechs that generate revenue overseas, 43% earn more than half of their revenue from overseas sales.

For the fintechs planning overseas expansion in the next three years, the US, UK and New Zealand remain the top three most attractive markets. Last year, New Zealand was by far the top international destination to expand to in the coming year, as fintechs sought expansion closer to home during the challenges of the pandemic. However, in line with previous years, New Zealand is now back on a largely equal footing with the US and UK in terms of expansion in the next three years. Singapore remains an attractive market, potentially on the back of Austrade’s focus on fintechs for its Landing Pads Program to facilitate trade flow and access, proving that government investment and incentives can have a multiplier effect and boost confidence.  

Top markets for international expansion in the next 3 years

2022 2021
1 United States 47% 1= New Zealand  50%
2= New Zealand  46% 1= United Kingdom 50%
2= United Kingdom 46% 3 United States 50%
4 Singapore 43% 4 Singapore 45%
5 Canada 32% 5 Canada 30%

In 2022, Canada’s place in the top five was confirmed, with fintechs beginning to see an increasingly greater scope when compared to the saturated US market. In contrast to the US, where every state has its own regulations and licenses, Canada is seen as close but a more startup friendly environment with fewer well-established competitors.

Attracting and retaining talent remains a top priority

Attracting and retaining staff from within Australia continues to be at least somewhat of a challenge according to 85% of respondents. Consistent with 2021, the scarcest areas of talent across the industry are engineering/software (66%), data engineer/data scientist (40%), product management (29%) and sales (29%). Anecdotally, the toughest roles to fill are those at the mid/senior level.

Fintech Census 2022 Infographic 3840 x 2560 talent

Respondents say the top three challenges or inhibitors to attracting and retaining talent are rising employee salaries (66%), access to skilled domestic workers (58%) and competition from big tech (52%). Challenges attracting and retaining talent is a phenomenon that is not unique to fintechs. It’s a top challenge across sectors and geographies globally with the highly cyclical technology sector particularly impacted.

Fintech Census 2022 Infographic 3840 x 2560 retain talent

Fintechs are aware that tech talent is less interested in equity or pay, and more in the experience a firm can give them. To this point, hybrid working is prevalent, with 89% of fintechs choosing this popular model. The vast majority (87%) of fintechs have a physical office location, but only 8% support purely office-based work. 

Some are also pragmatic that, in the wake of the likely industry consolidation, talent will disperse to those surviving the downturn – temporarily easing the talent crisis. The super-strong jobs market may already be plateauing, with job vacancy numbers starting to stabilise.

How should the ecosystem respond? 

As Australia struggles to avoid a recession, fintechs will play a vital role in an innovation-led recovery – a key enabler to unlocking value from the local and global economies. But to help the sector remain vibrant and reach its potential, every part of the ecosystem needs to play its part. This includes:

  • Government and regulatory support game changing

    To help the fintech industry thrive, respondents believe the new Federal Government should focus on greater founder and start-up support via incentives (43%), supporting greater capital flow for investment (37%), and greater support for tax incentives and grants for Australian based R&D and commercialisation (36%).

    Asked what specific initiatives they believe would best help to grow and support the fintech industry, the most common suggestions were:

    • Making the R&D tax incentive more accessible to start-ups
    • Having greater non-dilutive incentives like tax incentives, concessional loans or grants
    • Reducing payroll taxes for new hires to help combat big tech’s ‘open chequebook’ talent approach
    • Lowering tax rates for income attributable to Australian IP/technology/patents
    • Offering tax support for fintech’s collaborating with universities and publicly funded research organisations

    The R&D tax incentive continues to be a lifeline and, increasingly, a key funding lever to many fintechs, with some founders sharing that over the past year it has been critical in avoiding redundancies and accelerating fintech R&D to maintain a steady state, reduce burn rate or fuel growth.

    Similar to the 2021 Census, half (51%) of the fintechs surveyed have either successfully applied for the R&D tax incentive or are in the process of applying. At the time of census close, 43% had a successful application in the past two years, with another seven months left to lodge an FY22 R&D tax incentive application. Also consistent with 2021 results, survey respondents say the R&D tax incentive improves the sustainability or growth of their business (79%), influences organisations’ decisions to undertake R&D in Australia (77%), and encourages onshore operations (72%).


    of fintechs have successfully applied for the RDTI in the past 2 years

    Fintech Census 2022 Infographic 3840 x 2560 7 in 10

    However, 64% are either not confident, or only somewhat confident that they understand the incentive’s eligibility criteria. Given the critical importance of this productivity lever, the Government should continue to improve stakeholder engagement, communications and guidance. This is especially true around software R&D, where 57% of respondents wanted even further clarity despite new Ausindustry software guidance being released in 2022. Fintechs may also find that working with a partner can help to ease the application process and avoid potential pitfalls.

    Austrade's Export Market Development Grant (EMDG) continues to have a limited reach within the sector. Only 8% of respondents say they have received the grant in the past, and 8% intend to apply for it in FY23. Although Austrade asserts that fintechs are intended to be EMDG grant recipients, in practice the wording of the regime’s broad exclusions is resulting in fintechs being unintentionally excluded. Due to these exclusions, a widely held view persists that entities related in any way to the financial services industry cannot claim the EMDG.

    Given unintended outcomes of the exclusions, we recommend Austrade immediately issues specific guidance for the fintech industry and, eventually, reform the fintech-related exclusion wording to ensure EMDG funding is available to support Australian fintechs to scale globally. 

    Incentives that help fintechs to access cash and capital are now key levers and a high priority across fintechs and government, generating economic opportunities and jobs. Such levers help governments to align growth with other policy goals, such as sustainability, digital transformation or social equality. It’s pleasing to see the Federal Government’s growing commitment to incentivise investment, innovation, entrepreneurship and R&D, including software R&D.
    Malia Forner
    EY Government & Investment Incentives Partner and Oceania Start-up and Entrepreneurship Leader, EY Private
  • Now is the time to rally

    Individual fintechs can increase capital raising success by:

    • Investing back into the ecosystem – Successful fintechs are forming their own venture capital funds to work with early-stage, high-potential start-ups. This should become common practice in the sector, with leaders drawing on their own experience to help others succeed.
    • Focusing on ESG to increase access to funding – Given investor due diligence will increasingly include ESG questions, we expect to see an uptick in ESG focus across the fintech industry. Currently, only 30% of fintechs surveyed measure their business sustainability or carbon footprint, 19% have a sustainability goal and only 27% have implemented some sustainable business practices. Of those fintechs with no sustainability goal or practice, 30% have no intention of establishing these at this time. But soon they won’t have a choice. With the rising importance of ESG, and strong investor, shareholder and consumer expectations, the sector needs to get serious about developing robust, credible and measurable sustainability strategies. 


    of fintechs have a sustainability goal, and


    of fintechs have implemented sustainable business practices

    • Emphasising scalable growth and profitability – Rather than focusing on growth alone, when engaging with the market for capital or M&A, fintechs must ensure their technology and operations are scalable and strategies are aimed at delivering sustainable local and international growth.
  • Opportunities to expand the talent pool

    • Addressing diversity, equality and inclusion (DE&I) – The fintech industry continues to struggle with DE&I, drawing its talent from two traditionally male-dominated industries: finance and technology. Although culturally and linguistically diverse (CALD) participation in the Australian fintech workforce is increasing, it remains low with an avarage of 28% of employees identifying as CALD, versus 25% in 2021. Female representation remains stable but low at all levels: 34% in the sector (35% in 2021), 28% in leadership (26% in 2021), 28% of founders (24% in 2021) and 25% of advisory board members (23% in 2021). However, we expect diverse representation to grow through more inclusive working environments, and targeted talent and migration pathways in Australia. This will help the industry thrive, promoting access to a wider pool of talent.

      Diversity should be an imperative at every stage of growth. Better data, measurement and reporting of disparities is one step to improving CALD equality. We are also seeing improved targeted investment to change the status quo in government funding, private capital, particularly venture and angel funding, and education. But more can always be done. 



    of fintechs have a female founder

    Fintech Census 2022 Infographic 3840 x 2560 4pies
    • Considering new pathways – The fintech industry needs a skills pipeline to help transfer, retain and attract talent to and within Australia. Some fintechs are already looking at temporary insourced or contract labour to fill their talent gaps beyond geographic boundaries. Improved skilled migration pathways could also help by connecting refugees and migrants to current and future job opportunities. 
  • Cross-pollination within and beyond the sector

    Finally, fintechs must build cross-pollination within and beyond the sector. This is about how fintechs can partner with banks and other incumbents, and with other tech companies, to take core products into non-financial markets. It’s also about how fintechs can partner with each other.

    Australia is one of the more mature markets globally adopting fintech products and services by both consumers and businesses, directly or via their banks. Fintech is a key component in financial services evolution because fintech innovation makes it possible to unbundle traditional value chains and create new business models. Partnering opportunities include:

    • New to old – New fintech entrants can partner with established fintechs that may already have access to banks to deepen the relationship and relevance to their common customers. 
    • Cross-border cooperation – Fintechs can accelerate their international expansion plans by partnering with overseas fintechs to provide complimentary products and services, broadening customer acquisition and accelerating time to market.

Collaboration essential to maintain fintech growth momentum

Australia’s vibrant fintech ecosystem has demonstrated rapid growth and achieved international success. In the last funding round, the majority (64%) of local fintechs were valued at $50 million or less, 29% between $50.1 million to $1 billion and 7% at more than $1 billion. Our global fintech ranking has risen to second in the Asia-Pacific region and sixth in the world. The impact of the Australian fintech sector has never been clearer, with regulators and governments actively looking at the sector’s impact on innovation, competition, jobs and growth in Australia and on international exports.

But, as investors become more risk averse, access to talent becomes tighter, and in the face of mounting macroeconomic and market uncertainty, the sector will need support to remain competitive and drive sustainable growth.

Government and regulators have a role to play as a multiplier, including opening up access to existing grants and targeted incentives for investors and business, designed in consultation with the industry. Fintechs themselves can also improve sector resilience and sustainable growth through partnerships with each other and across sectors, investing back into the ecosystem, strengthening their ESG capabilities, ensuring technology and operations are scalable, planning for international growth and opening up the talent pool by considering diverse and alternative hiring strategies. 

Thank you to everyone who contributed to the 2022 Fintech Census, helping to build this vital dataset for our rapidly maturing ecosystem.

Replay our webcast where we discuss the highlights from the EY FinTech Australia Census 2022. 

Click here


This years' Census finds the sector well-positioned to ride out the coming challenges, with steady growth and increased maturity. Fintechs are facing tightening access to capital and talent. But with ecosystem collaboration and government support, they can continue to boost innovation, competition, jobs and growth in Australia.

About this article

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.

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.