Globally, the financial services industry is experiencing a wave of disruption brought about by advances in mobile and digital technology.
A recent report aimed to identify the Top 50 fintech companies that are taking advantage of these rapid technological changes, along with intergenerational shifts in attitude towards traditional banking, investing and accounting practices. Notably, several Australian companies featured prominently on the list. Here are the firms which made their mark:
So, this one is technically New Zealand based, but the Xero story is too big to ignore. Since being founded in 2006, it has emerged as a leader in providing SMEs with accounting software linked to the cloud. Listed on both the New Zealand and Australian stock exchanges, it has experienced dramatic growth in user numbers for its pay-by-the-month “software as a service” (SaaS) offering and is currently trying to break into the massive US market.
SocietyOne is currently Australia’s only operating peer-to-peer (P2P) lending platform. Similar to the model of LendingClub in the US, SocietyOne aims to provide borrowers with loans of up to A$30,000 at more competitive rates than traditional financial institutions. It does this by using technology to connect them directly with willing investors, therefore bypassing the costs associated with maintaining typical banking infrastructure.
Nimble operates in the payday lender space, providing small, short period personal loans. Borrowers are limited to loans of up to A$1,200, with a maximum loan period of 50 days. Nimble’s advantage lies in the speed of its innovative platform, which sees loans approved in as little as 11 seconds. Funds transfers are then completed within 60 minutes. That’s fast! Their TV ads are pretty funny too.
Stockspot was established in 2013 with the aim of better servicing the changing needs of retail investors. It does this by providing access to professional level investment advice at greatly reduced cost via low fee Exchange Traded Funds (ETFs). It is the first online investment platform of its kind in Australia.
Pocketbook is an app that is designed to help users better manage their personal budgets. By linking with your various banking accounts (savings, credit cards, loans) pocketbook gives you improved transparency over exactly how much you’re spending. More importantly, it sorts your expenses into categories so you can see not only what you’re spending, but where.
Billing itself as the social network for investors, SelfWealth enables users to compare the performance of their investment portfolio to that of other members, as well as professional managers and general market indexes. Platforms of this kind are expected to be increasingly popular amongst the large number of Australian retail investors looking after their own retirement savings via Self Managed Superannuation Funds (SMSFs).
Like SelfWealth, livewire aims to capitalize on the trend towards use of social media platforms. It does this by providing a single online forum where investors can source a live stream of relevant financial information. All contributors to the site are verified financial professionals or journalists. This saves individual investors from having to troll through multiple sites themselves.
This is just a sample of the more innovative names in Australian fintech. Whether it be in lending, accounting or investing, new online / digital entrants are increasingly challenging the position of traditional financial services firms. This is a trend that is only going to accelerate.