The role and effectiveness of FinTech Australia has been questioned following the sudden departure of its CEO just four months in the role, with a prominent member of the FinTech community saying it had “failed miserably” to represent the sector.
There are now discussions within the sector about the creation of a new, representative body separate to FinTech Australia, InnovationAus.com understands.
But FinTech Australia chair Alan Tsen has defended the organisation’s track record, and said it’s impossible to please everyone in the wider sector all of the time.
The lobby group’s chief executive Brad Kitschke, who took on the role in late May, tendered his resignation to the FinTech Australia board late last week, citing health concerns.
The resignation comes at the busiest period of the year for FinTech Australia, with its two major conferences fast-approaching, the launch of its annual census, and the imminent passage of a series of FinTech-focused legislation in Canberra.
Mr Tsen said the organisation’s board would cover the workload, with current head of community and partnerships Rebecca Schot-Guppy to serve as interim-CEO.
“The board will be stepping up to help plug the gaps and we’re excited about some of the things we’ve been working on,” Mr Tsen told InnovationAus.com.
“When it’s someone’s health you have to take that seriously. Brad made the hard decision to step away and focus on getting better.”
Mr Kitschke’s aim to grow FinTech Australia in the same way as Uber and often combative statements on the big banks put some in the wider sector off-side. But in the days following his resignation, criticism about the organisation’s consultations with the local sector and focus on lobbying Canberra have surfaced.
A number of prominent members of the local FinTech sector have now gone on the record about their concerns surrounding FinTech Australia as the organisation faces a major transitional period and a new CEO.
InnovationAus.com also understands that there are early discussions on the potential formation of a new, separate representative group for the FinTech sector, with an email sent to community members late last week.
A number of members of the community have raised concerns that FinTech Australia has not done enough to engage local FinTech companies and include them in policy discussions, instead focusing mostly on Canberra lobbying efforts.
Tyro FinTech Hub head Andrew Corbett-Jones said FinTech Australia has “failed miserably” to be representative of the local industry.
“FinTech Australia has done good work in articulating in Australia the need for initiatives it has seen in other countries, especially in the UK. But it has failed miserably in its primary task of becoming the genuine representative of FinTech startups,” Mr Corbett-Jones told InnovationAus.com.
“Of all the startups that have been through Tyro FinTech Hub, I’d struggle to count on one hand the ones that bothered joining FinTech Australia,” he said.
“We need an organisation that is more concerned with bringing the FinTech community together and less with shouting about how important it is.”
Tyro FinTech Hub was a founding member of FinTech Australia, but is no longer involved with the lobby group.
But Mr Tsen has defended FinTech Australia, saying it has a proven track-record of getting results for the Australian FinTech sector.
“We’ve always worked really hard to make sure our member’s voices are heard and presented in submissions and have worked to represent the ecosystem in a balanced and fair way so we have policy that is workable,” Mr Tsen said.
“We’ve worked tirelessly with Treasury and the regulators to make sure it’s policy that’s in the best interests of the ecosystem. There are always those who want to say things and that’s the nature of the game,” he said.
“We’re working hard to make sure our members’ voices are heard and we’ve had great impact to date.”
FinTech Australia was set up in early 2016, with inaugural CEO Danielle Szetho appointed in June of that year.
The group has closed ties with the federal government and opposition, and has claimed a series of policy wins for the sector, including open banking, equity crowdfunding and comprehensive credit reporting.
The lobby group charges its members an annual fee which is used to run the organisation, with costs ranging from $300 per year for a single founder to $11,000 annually for a FinTech with more than 30 employees.
It also has corporate membership fees for banks, super firms and the like, costing $7000 yearly for those with more than 30 full-time employees. FinTech Australia now has about 250 members.
FinTech Summit and First Rung founder Glen Frost has also criticised the organisation’s claimed representation of the sector, and said there is a lot riding on who takes up the reins next.
“FinTech Australia is a crucial and powerful organisation. It should be leading the growth of a whole new sector that creates jobs and new business opportunities, and two CEOs in two years is not a good look,” Mr Frost told InnovationAus.com.
“The recruitment process for the next CEO must be professional and must involve an external recruitment agency. The CEO role can’t be awarded to a friend of the chairman or a board-member,” he said.
“The next CEO of FinTech Australia must have both FinTech and financial services experience, as well as lobbying experience.”
FinTech Australia is planning to launch a recruitment process to find a new leader soon.
“We’ll step away and have a look at who might best fit the role and think about the replacement. It’s an important role – being the voice of FinTech is something that the organisation has done an exceptional job of,” Mr Tsen said.
We’ve had an impact on quite a lot of policy, and it’s something the organisation doesn’t take lightly,” he said.
It’s an important time to have a group that is representing the interests of the FinTech sector, Mr Frost said.
“FinTech Australia needs to better represent the needs and interests of the independent FinTechs – improving the journey of FinTechs from startup to IPO,” he said.
“This is a very exciting, yet challenging time for FinTechs and we need an association that champions our cause in Canberra.”