Creditorwatch has released a white paper detailing just how vital Australia’s fintech sector has been to helping SMEs to survive the pandemic.
Their report, entitled Future of Fintechs, deep dives the effect that technology has had on the Australian banking environment, in particular the way that tech-savvy lenders were able to cope with remote working and social distancing to help their clients.
“The fintech ecosystem in Australia is thriving, and rightly so,” said Patrick Coughlan, CEO of Creditorwatch.
“We’ve seen the industry come on leaps and bounds over the past decade. Its growth is one of the most important trends in our financial services industry, and fintechs are defining new ways for Australia’s financial services system to operate.”
“The past year has been a massive opportunity for fintechs to showcase their benefits to the community. For example, social distancing drove widespread adoption of contactless payments and ordering services. This whitepaper also shows rising consumer confidence in digital technologies is helping spur demand for the services that fintechs offer.”
Fintechs have been willing to help distressing businesses in a way that larger lenders have struggled to match, especially given the challenging environment of the last 18 months.
“Australian fintechs are often honed in on a very specific problem and don’t rely on the legacy infrastructure that the big banks do,” said Coughlan.
“This enables them to move faster, and often means they’re able to help distressed businesses in a way that big banks can’t. In saying this, big banks certainly see fintechs as partners that can help them tap into this unmet consumer demand.”
Central to fintech growth has been the advent of open banking, which has seen data more readily shared and more up-to-date financial information more easily available.
“Open banking is still in its infancy in Australia,” said Coughlan. “Beyond more consumer choice and specialised products, open banking has the potential to make lending and banking options more accessible, especially for SMEs.”
“In the past small businesses have been unable to provide their bank with an accurate financial position due to outdated data collection methods. Previously this would have been costly for these SMEs, but now with open banking, we’re seeing lots of additional financial services available to SMEs.”
