Fintech glory for Australia, but a long way to go for NZ

Published on the 19/12/2019 | Written by Heather Wright


Fintech

Lessons to be had from Lithuania’s success…

In the fintech world, NZ apparently still has a long way to go, but Australia is sitting pretty in the top 10 for global fintech countries.

The Findexable Global Fintech Index City Rankings shows many traditional financial centres, such as Zurich and Shanghai, are missing out on fintech and being usurped by emerging centres, such as Sao Paulo, Bangalore and Mumbai. And, just because an area does well for startups, doesn’t mean it will do well for fintechs, either.

The San Francisco Bay area led the global rankings, followed by the traditional financial strongholds of London, New York and Singapore with Sao Paulo rounding out the top five.

Many traditional financial centres are missing out on fintech and being usurped by emerging centres.

Simon Hardie, Findexable founder and CEO, says “The rankings are evidence of a worldwide de-coupling between the financial strength and the commercial domination of traditional financial centres.

“Financial wealth is no guarantee of a city’s status as a fintech hub. You might call this the rise of non-traditional finance.”

The report, which ranked fintech ecosystems in more than 230 cities across 65 countries and covering 7,000 fintech companies, puts Australia at eight on the Fintech Country Rankings, with New Zealand 45th.

Helping Australia to its top 10 ranking is its strength in digital payments, personal finance and alternative lending. The report notes Judo Capital, Airwallex and MoneyMe as local fintech leaders – but also flags a poor showing in Wifi speed for the country.

The US, UK and Singapore are ranked the top three fintech countries, followed by Lithuania, Switzerland, the Netherlands and Sweden. Almost half of the top 100 fintech cities are in emerging markets.

Lithuania – a small country previously often overlooked – is a country which, according to the report, has ‘quite literally put its economic heart and regulatory soul into attracting fintech firms’.

“A country with a population about a third of the size of London is now arguably Europe’s second fintech centre.”

When it comes to regional rankings the report, which says 60 percent of global GDP will be digitised by 2022, puts Sydney as tops for A/NZ, taking fifth place for Asia Pacific, behind Singapore, Bangalore, Mumbai and Hong Kong. Melbourne just misses out on a top 10 ranking, taking eleventh place, with Brisbane at 28, the Gold Coast 31 and Perth 33 out of the 38 Asia Pacific cities ranked.

New Zealand’s sole showing, Auckland, comes in at 21.

Globally, however, Auckland is ranked just 94 – well behind Sydney’s 13th spot or Melbourne’s 32, but ahead of Brisbane, which comes in at 146.

New Zealand is however, flagged as one of ‘The Next 20’ fintech hubs – coming in at 12 on that list.

“These 20 hubs are in the top 120 fintech cities worldwide and are the fastest climbers up the global startup ecosystem ranking table,” Findexable says. “They present a global mix of cities with a good or improving quality of life, deep talent pools or proximity to a thriving startup scene inspiring local innovation.”

Among the common features of winning fintech hubs around the world are fintech-friendly regulations which incentivise entrepreneurship and encourage investment with Bogota, Mexico City and Vilnius held up for having great regulatory frameworks.

Size, on the other hand, doesn’t matter, with smaller cities providing ecosystems where people can connect easily, the report says, and those ecosystems are crucial, providing both a strong talent pool and ‘a fun location with a global vibe’.

The index is based on a range of factors, including the quantity of fintechs, the size of the fintech ecosystem and supporting structures, their impact and performance, including  the size and growth, investments, value generation and international collaboration, and the environment such as ease of doing business and regulatory environment.

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