The latest douse of, at best, tepid water came from Australia’s Productivity Commission in its report Competition in the Australian Financial System.
"The truly interesting twist is whether those established players will be traditional or non-traditional.”
“Fintechs are not, on present indications, likely to have the kind of competitive disruptive effect that would alter the market power of major banks in the foreseeable future,” the PC found.
“In the long term, lowering barriers to entry and growth, including greater access to consumer data, may lead fintechs to favour competition against incumbents over collaboration.”
The commission added gnomically we “must look further afield for substantial offsets to current market power.”
While global technology companies have been creating bigger waves internationally the PC acknowledged it was not the case in Australia.
The best overall snapshot of where fintech is at is the biannual KPMG Pulse of Fintech report, the latest edition of which finds overall global fintech investment “roared ahead at a record pace” in the first half of 2018, reaching $US57 billion.
For Australia the key stat was not as loud but still a rise to $US63.7 million from $US56 million in the first half of 2017 – albeit lower than the second half of 2015 and the first half of 2016.
KPMG noted much of the investment in Australia was concentrated across a small number of deals – just seven compared with 12 in the second half of 2017 and 16 in the first half of 2017.
"Significant outliers still dominate the Australian fintech ecosystem, propelling the majority of this growth, such as the Rubik Financial deal in the past and, most recently, the acquisition of financial data analytics provider Hometrack Australia for roughly $US97 million by REA Group," according to KPMG.
There was a similar concentration in deal numbers globally with the two biggest being the record-setting $US14 billion raise by Ant Financial in the second quarter of 2018 and Vantiv’s acquisition of WorldPay for $US12.9 billion in the first quarter.
While the overall prognosis for fintech remains healthy, particularly around blockchain, there is not the preternatural energy and growth the hype might suggest.
As veteran financial services entrepreneur and fintech analyst Grant Halverson of McLean Roche notes “you know fintech is in trouble when four real estate startups raise almost as much money as the entire Fintech sector”. He was referring to the $US8 billion raised by WeWork, Opendoor and Compass.
KPMG Australia’s Head of Banking and Global Co-lead for Fintech Ian Pollari is more sanguine: "With a significant amount of capital waiting to be deployed, a growing diversity of fintechs hubs across the globe and more corporates looking to seize on larger M&A opportunities, investment in fintech is expected to remain strong heading into the second half of 2018.”