The Fourth Industrial Revolution has arrived and it’s transforming every aspect of our lives. Fintech is leading the charge by revolutionising how we transact, protect and save money. Forget complex products and long bank lines; financial services are now about convenience, simplicity and lifestyle.
While traditional businesses scramble to keep up, fintechs are setting consumer expectations – 64% of fintech users prefer to use digital channels to manage all aspects of their life, the 2017 EY fintech Adoption Index shows.
According to the EY fintech Australia Census 2017 report, fintech adoption in Australia has jumped from 13% in 2015 to 37% in 2017.
“And it’s expected to reach 43% in the coming year,” says Meredith Angwin, partner at Ernst & Young. “Australia is fifth in terms of user adoption, with developing nations like China and India leading the way globally,” she adds.
Angwin believes Australian fintech businesses are coming of age. One way they’re doing this is by taking a step back and listening to their customers – something that is easier to do as an early stage business.
“Without legacy constraints, start-ups can listen to customers and reimagine how things are done,” Angwin says.
Indeed, feedback from customers has guided the service model that UNO consultants and advisers have adopted. Customer insights also influence their performance just as much as UNO’s digital platform.
“It’s a combination of better technology and superior human support that we need to scale accordingly,” says founder Vincent Turner.
Aside from UNO, there is a swathe of new businesses with their digital fingers firmly on the customer pulse. Here are six more local fintechs shaking up the industry:
Listed on the Australian Stock Exchange a few months ago, Raiz is a micro-investment app. It encourages users to invest small change by rounding-up their purchases. If you spend $4.50 on a coffee, for example, Raiz will round it up to $5.00 and invest the 50c for you in one of its six diversified portfolios. It does this for a small maintenance and account-keeping fee.
The app is also like a personal finance assistant. You can make larger lump sum deposits into managed funds or other financial products. Targeting the youth market, it now has more than 160,000 customers, 80% of whom invest at least once a month.
It’s difficult to imagine larger institutions embracing this type of convenience, but they’re quickly catching up. Three of the big four banks (NAB, Westpac and CBA) launched Beem It this year, a payments and mobile wallet product targeted at small business. Beem It enables companies to receive payments instantly via a smartphone, eliminating the need for costly POS terminals. Consumers can also use Beem It to split restaurant bills instantaneously, meaning no more awkward moments among friends.
Recognised as Australia’s fastest growing company in 2017, Cover Genius is helping online businesses provide insurance cover to their customers. Their end-to-end solution enables ecommerce businesses, from car rental companies to share accommodation, to offer insurance and increase their revenue. This world-first product has already written gross insurance premiums valued at more than $1 billion. Available in more than 60 countries and 20 languages, Cover Genius uses data science and technology to customise insurance policies to local markets and different business models.
One of the hallmarks of a good fintech solution is a seamless interface that makes it easy for customers to transact. Take buying and selling property, for example. Traditionally, this has been a complex and paper-intensive process. Thanks to PEXA, the entire transaction can now be completed online, from lodging property transfer documents to exchanging funds and settling purchase agreements. Customers, financial institutions, conveyancers and the Land Registry office all win. Funds are received faster, there’s less paperwork, and settlement delays are reduced. To date, more than $208 billion worth of property has been successfully sold or refinanced with PEXA.
zipMoney lets you pay for things without needing the cash upfront. Funded by Westpac, customers sign up and receive a line of credit that they can use at more than 3000 stores across Australia. When they’re ready to buy, they just select zipMoney during the checkout process and their balance is used to pay for the products. zipMoney gives consumers the flexibility to pay back the borrowed amount in weekly, fortnightly, monthly or one-off payments over three, six or 12 months.
Five-year-old Stockspot is Australia’s first digital investment adviser offering what is known as robo-advice – financial advice delivered online via computer, tablet or smartphone. The company relies on algorithms to help Australians access expert investment advice and portfolio management that is matched to their personal goals and capacity for risk. It will even update its advice if circumstances change.
It’s important to note that the information we give here is general in nature – no matter how helpful or relatable you find our articles. Even if it seems like we’re writing about you, it’s not personal or financial advice. That’s why you should always ask a professional before making any life-changing decisions.
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