Financial technology is a rapidly growing sector, and Australian start-ups are looking beyond our shores. We talk to local experts about the potential – and pitfalls.


Australian fintechs are enjoying some of the strongest market penetration in the world, so it comes as little surprise that many of the nation’s start-ups are looking further afield. While opportunities for the sector are numerous, expansion also presents risks.

New horizons

With Asian markets showing sustained growth in the fintech arena, especially in India and China, many Australian fintech firms are looking to expand into the Asia-Pacific region.

The head of Deloitte’s Financial Services Payments practice in Australia, Richard Miller, says Australia’s engagement with Asia has evolved significantly. “Australian fintechs went to Asia for development support early on, then moved to accessing capital, and are now growing into those markets,” Miller says. 

“Usually companies gain skills in working across geographic boundaries, which helps develop their underlying skills to be successful players in foreign markets: working remotely; defining expectations and needs; and managing operations across a long distance.”

Look to China

“I tell all of my clients that if you want to see the future, look to China,” Miller says. “Across the payments space and blockchain, anything to do with something on a smartphone, they have the sophistication and technology.”

In many areas with a high degree of activity, fintech and the big banks are competing, Miller says. “They’re going after the payments space, particularly any cross-border plays, and that supports trade flows between countries, as well as blockchain, trade finance, and foreign exchange,” he says. 

“China’s growing middle class is creating a huge demand for almost any product or service here in Australia – they’re readymade and high-growth markets,” Miller adds. “Tracking the provenance of goods and ensuring their quality is getting a lot of traction, as supply-chain integrity can be a problem at times. We’re seeing a lot of blockchain suppliers targeting this area at the moment.”

Hearts and minds

One of the key challenges to expanding into Asia is culture. Not only are there many cultural differences between Australia and Asia, but substantial differences between countries within the Asian region. 

“Fintechs usually have a history of pitching themselves, but in Asia they need to learn to hold off and listen to understand. Most Asian countries are ‘high context’: a lot is left unsaid, and you have to read between lines,” Miller says. 

“This leads to a need to partner well – finding the right people to help you know what you don’t know. A local partner can help you understand pitfalls and challenges and, importantly, help provide a presence on the ground. Working virtually has its limitations in a high-context culture – eventually you need someone there to represent your product or service.”

Start-ups and high-growth companies used to being bold and disruptive need to take a more nuanced approach overseas. “There might be a tolerance for it in Australia, but Asia requires more humility, respect the construct rather than overthrow it, and work within the harmony that the countries have been trying to build,” Miller says.

Playing by the rules

Rob Nicholls, a lecturer at the University of NSW Business School and former staffer at the Australian Competition and Consumer Commission, agrees that the regulatory environments in Asia will be a challenge for many fintech players.

“In Australia, we have regulatory twin peaks: the Australian Securities and Investments Commission, which conducts regulation, and the Australian Prudential Regulation Authority, with its supervisory role,” Nicholls says. “In many countries the supervisory responsibility lies with the same regulator or with the central bank, and this creates tensions.

“Businesses being even mildly disruptive need to meet both conduct and prudential regulations, and they need to be aware that that structure is likely to have different priorities.”

State enthusiasm for fintech entry, however, may trump regulatory regimes, particularly in more centralised countries. “In Australia and the UK, governments tend to take the approach that you do things at your risk, and they learn from it,” Nicholls says.

“Somewhere like Singapore, which wants to be the financial centre of Asia, may want to play with you in the sandbox because they want you to succeed, and export to the ASEAN [Association of South-East Asian Nations] market from there,” he says. 

The recent announcement of a fintech “bridge” between Australia and the United Kingdom will give Australian firms access to a $13 billion market, and Nicholls believes Australia will try to promote this with its many multilateral partners, such as ASEAN, Asia-Pacific Economic Cooperation (APEC), and TPP-11 (the 11 nations signed to the Trans-Pacific Partnership). 

Setting up for success

Jack Quigley, Managing Director of CrowdfundUP, which specialises in real estate investment, says that more than just exporting products and services to Asia, Australia can learn a great deal from adapting to and adoption in Asian markets, particularly China. 

“The catch-cry of start-ups is ‘mobile first’, but in China it’s ‘mobile only’,” Quigley says. “What they do better than the West is user experience. Firms entering the market need to take the user experience of the Chinese market and blend that with Western rules and regulations, giving customers confidence.”

Quigley champions Austrade’s Landing Pads program, which helps market-ready start-ups scale up to key markets in San Francisco, Tel Aviv, Shanghai, Berlin and Singapore. “Our market entry into China has been led by strategic missions and silent partners,” he adds.

Miller agrees with this approach, and says fintechs need to be prepared for the amount of investment and focus required to move into foreign markets. 

“Being clear on what you’re doing and why you’re doing it is really important ­– a lot of time and money can be wasted if you are not clear on your broader strategy,” he says. “When partnering for mutual benefit, you also need to understand your partner’s motivation and strategy.”

This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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