Australia's FinTech boom will hinge on collaboration

The emerging FinTech (financial technology) market is opening up vast opportunities for Australian ICT companies, but taking a leading role in FinTech innovation will require a coordinated effort from government and the private sector.

This is among the key findings of a new report from Frost & Sullivan into the Australian FinTech market.

In order to ensure Australia’s development as a FinTech leader, government agencies, financial institutions and start-ups will need to form partnerships and research collaborations, the report has found.

Frost & Sullivan has estimated that the Australian FinTech market will grow to $4 billion by 2020. The segment will afford a range of opportunities in the security, cloud, managed services, AI, biometrics and data centre segments.

Blockchain, the technology used by the Bitcoin digital currency ecosystem, will be another growth driver. Some companies have developed blockchain-as-a-service models while others are selling cryptocurrencies.

Frost & Sullivan A/NZ research analyst for ICT Saranga Sudarshan said data and connection security will be the most significant challenge for Australian FinTech companies, largely because mobile payments currently contribute the majority of revenues across all FinTech segments.

“Established institutions already have large security expenditures, with security systems and protocols built over many years. Attacks against these institutions are highly unlikely and more unlikely to be successful,” he said.

“However, the sensitivity of financial data, unlike any other kind of personal data, will mean security will be a concern at every other stage of a product’s delivery chain.”

Sudarshan said FinTechs are expected to drive the expansion of biometric security, which will be the future of mobile security.

Image courtesy of Tech in Asia under CC