When it comes to continual success, any good business should be adaptable and have a solid vision for the future. Similarly, whole sectors need to be willing to change and have a vision that not only looks to the future but also reevaluates the now.
In the FinTech sector, for leaders to truly make waves, they cannot just be satisfied with “good” but should strive for “great”. What do we mean by that?
To start, instead of localising their vision, they should plan for reach on a global scale. Think Canva or Atlassian, two Australian companies that have found enormous success in our backyard and overseas. And in that success, they have also achieved a lot of power within their industry and customers.
How did they manage this? Like any business – with an idea in place. But we also imagine they took stock of where they wanted to be in the future, added some innovation and drive, and things took off from there.
While that sounds simple enough on paper, putting things into action is often easier said than done. Success is generally more complex than we hope – to reach and maintain. That is the nature of business, although you should not be discouraged by the thought! Knowing where you stand and what you need to change gives you an edge over those stuck in the past.
But before we discuss the future of your business, let’s dive into the current state of the Australian FinTech sector.
The Now . . .
Digital Adoption and Security
With scams, fraud and data breaches on the rise, Australian consumers are becoming increasingly concerned about the security of their personal information. However, their reliance on digital payment methods is also growing, as is the demand for faster and more convenient digital payment solutions.
It is essential, then, that the industry continue to prioritise strong security measures to protect consumers and their own businesses. When it comes to adopting new digital payment methods, fraud and scams are the top concerns for 54% of Australian companies, according to the University of Sydney.
To help combat threats, re-aggregation (where financial data is aggregated in one place) is expected to be a trend in the near future. This will enhance security while also simplifying financial management.
Digital Payment Methods for B2C and B2B
Did you know that four out of five online customers will abandon their shopping cart if their chosen payment method is unavailable?
Availability is obviously an issue here. Consumers want options for digital payment methods… specifically, they want their option. Businesses that cannot give them that are at risk of losing a significant amount of sales. Remaining innovative and adaptable, therefore, is key for those offering B2C services. With online shopping becoming increasingly popular – and, in the case of the pandemic, often necessary – those who do not meet the demands of their customers may soon find themselves out of the game entirely.
B2B businesses should also take stock of their current digital payment system, as any issues could have a big impact. For instance, consider the ramifications of a delayed payment caused by a slow or faulty system. Late payments can have a cascading effect on the supply chain, the broader economy and the business’s reputation – a situation that no FinTech organisation wants to find themselves in!
Gender Diversity in FinTech
Like many sectors, some progress has been made towards gender diversity in FinTech. However, it unfortunately remains an uphill battle for many women. According to Harvard Business Review, women-led startups receive ‘less than 3% of all venture capital investments’, a sobering statistic highlighting the need for further change.
Everyone has a part to play when it comes to changing the status quo. To achieve true progress and make for a more inclusive industry, those in FinTech should work toward consciously promoting diversity in their everyday decisions.
Startup Funding Challenges
Startups play a vital role in the Australian business landscape and globally. Take Canva and all the good it’s done for users across the world, for instance.
Unfortunately, access to early-stage funding remains a hurdle for startups, hindering them from making serious progress. Even with the recent rise in crowd-sourcing platforms, the divide between wholesale and retail investors restricts capital inflow. This, in turn, impacts the Australian economy – an economy that is already facing significant issues.
While much has been done to mitigate this problem, further reforms are needed to drive greater investment into Australian startups and encourage plenty of innovation.
Fighting Financial Crime
As financial technology advances, so does the dark side of financial crime, with money laundering and other issues impacting the livelihoods of our most vulnerable.
With that in mind, people within the FinTech sector need to have a duty of care to ensure that they conduct regular risk assessments on their operations. In doing so, they can better protect their customers. . . and their own business. While building compliance and risk management into operations early in the journey is often a tricky balancing act, it is also worth the effort. Finally, continued education in cybersecurity is also an absolute must across the entire industry.
Looking to the Future
So, how can FinTech leaders achieve greatness in the future? There are many ways, starting first with thinking globally. Of course, FinTech startups are generally initially concerned with establishing themselves in the Australian market – and they are right to do so. But competing in the Asia-Pacific region, at the very least, should be part of their long-term vision.
It is no secret that the global FinTech landscape is highly competitive, with developments like India’s digital infrastructure (India Stack) setting the bar high. The market is also saturated with point solutions, making getting a foot in the door even more challenging.
With that in mind, FinTech leaders should look past point solutions and instead focus on creating end-to-end solutions to differentiate themselves from their established competitors. Aim for innovation on a global scale, something that will tackle issues outside of Australian borders.
The culture in FinTech (and Tech itself…) also needs a revolution, and not just when it comes to gender diversity. Consider how it works in the United States, where the best talent gravitates toward innovative tech companies.
In Australia, however, the best talent often opts for established incumbents. There are many reasons for this, such as organisational culture, potential risks and rewards (including share options) and tax considerations. But in the end, this needs to be changed in the future so that our top talents are where they should be: working with the ever-expanding FinTech and Tech sectors, where they are at the forefront of technological innovation.
Do you need help transforming your FinTech business? Mondo has worked closely with FinTech leaders like Verve Super to offer our support and expertise. Check out our case study with Verve Super to see our work in action.
