FinTechs present a policy wish-list
Stuart Stoyan: The FinTech sector still seeking more government support
Improvements to the R&D initiative and government-mandated open data controls are top of the Australian FinTech industry’s wish-list, while gender diversity remains a major issue for the sector, a new survey has found.
The 2017 EY FinTech Australia Census, released late last week, surveyed 166 local FinTech companies. This is the second year of the census and is the only industry-backed survey of its kind.
The biggest things thing these companies said would help them to grow was improvements to the research and development scheme, with nearly 90 percent of the companies supporting this.
The industry is still waiting on the government to respond to the controversial ‘Three F’ review into the R&D tax incentive, which concluded nearly 18 months ago. The review was conducted by Innovation and Science Australia chief Bill Ferris, chief scientist Alan Finkel and Treasury secretary John Fraser.
With Industry minister Arthur Sinodinos on extended leave from Parliament, the response has fallen under the control of assistant minister Craig Laundy, and is expected to be released as part of Innovation and Science Australia’s 2030 Strategic Plan.
Other major initiatives demanded by the FinTech sector include government-mandated open data controls, capital gains tax relief, reduced payroll tax and more transparent access to the New Payments Platform.
The government has announced a series of policies this year aiming to help the burgeoning FinTech sector, including expanded tax breaks to FinTech investors, removing double taxation of digital currencies, and a mandatory comprehensive credit reporting regime.
“It’s becoming clear from this year’s census that taxation reform, specifically around providing better access to research and development incentives and capital gains tax relief, and a mandated open financial data platform are key policy priorities for FinTech firms around the country,” FinTech Australia deputy chair Stuart Stoyan said.
The survey also found little improvement in the FinTech sector’s gender diversity. The proportion of female FinTech employees only increased by 2 per cent to 24 per cent of the overall FinTech workforce in the last year.
The top three recommendations to improve gender diversity in the sector from the surveyed companies were encouraging women to follow STEM career paths, adjusting recruiting practices and changing company culture.
Mr Stoyan said the industry is actively working to turn this statistic around.
“Our programs have included a speaker gender equality target at the Intersekt Festival, ensuring at least 30 per cent of the FinTech Australia board are women and by promoting a female FinTech leader of the year award at our annual Finnies awards,” he said.
The census found that the Australia FinTech is growing and maturing rapidly, with median revenue for the surveyed companies increasing by 200 percent from 2016. Nearly a quarter of these companies reported revenue growth increase of more than 700 percent.
More than half of the surveyed companies said they were planning an international expansion in the next year, up from 30 per cent last year. Top of the list for expansions was the UK, with these moves to be assisted by the federal government’s new FinTech bridge with its British counterparts, which aims to help FinTechs enter the UK market.
Nearly half of the FinTechs also said they were considering relocating their company overseas entirely, a slight decrease from last year.
“The fact that the industry has experienced a tripling in median revenue is a strong sign that FinTech firms are acquiring customers and making strong inroads into the traditional financial services sector,” FinTech Australia chair Simon Cant.
“Equally so, it is exciting to see that FinTech firms are now sufficiently comfortable with their domestic positions to be increasingly planning international expansions. This is another sign of a healthy and maturing industry.”
“There is a vast amount of work we need to continue to undertake to remove some of the barriers to our industry’s growth. This includes growing and diversifying our talent pool and driving ongoing policy and regulatory reform.”