Attracting and retaining staff from within Australia continues to be at least somewhat of a challenge according to 85 per cent of respondents. Fintechs said the top three challenges or inhibitors to attracting and retaining talent are rising employee salaries (66 per cent), access to skilled domestic workers (58 per cent) and competition from big tech (52 per cent).
Challenges with attracting and retaining talent are of course not unique to fintechs. It’s an issue across many industries and geographies globally, with the broader technology sector being particularly impacted. The fintech sector has an opportunity to expand their talent pool by better addressing diversity, equality and inclusion (DE&I) and also considering new pathways, such as a skills pipeline to help transfer, retain and attract talent to and within Australia.
Confidence falls on international expansion plans
The percentage of Census respondents who believe Australian fintechs are internationally competitive fell from 80 per cent in 2021 to 69 per cent this year, putting the sector’s confidence almost back to 2019 levels. Confidence Australian fintechs can win against international fintechs also fell to 57 per cent, from 67 per cent in 2021.
This local perception contrasts with anecdotal evidence from overseas investors and fintechs though, who view Australia’s fintech sector and market opportunity as highly attractive and competitive.
The Census data also show the percentage of Australian fintechs generating revenue from overseas remains steady (at 40 percent). Of those, 43 per cent are earning almost half of their revenue from overseas sales.
For the fintechs planning overseas expansion in the next three years, the US, UK and New Zealand remain the top three most attractive markets. Singapore is in fourth position and Canada has now consolidated its fifth position in the list with fintechs beginning to see greater opportunity there.
The road ahead
It’s clear fintech is here to stay and the sector has a vital role to play in unlocking innovation-led value from the economy. But collaboration across the entire fintech ecosystem will be needed to keep the sector on its growth trajectory.
Government and regulators have a role to play as a multiplier, including through opening access to existing grants and targeted incentives for investors and business, designed in consultation with the industry.
Meanwhile, fintechs themselves can also bolster the sector’s resilience to the market challenges ahead by focusing on greater collaboration and partnerships both within and beyond the sector, investing in the ecosystem, opening the talent pool by considering diverse and alternative hiring strategies and strengthening their ESG capabilities.
May Lam is the EY Oceania fintech leader and EY Asia-Pacific payments leader. Malia Forner is the EY Oceania start-up and entrepreneurship leader.