KPMG says a bounce in collective investment in Australian fintechs to $3.6 billion last year was back near pre-covid levels and provides “optimism for 2022 and beyond”.

Australian fintechs continue to gain traction and attract both local and international capital, KPMG says in its latest Australia Fintech Survey, and that will "only proliferate as start-ups mature and incumbents adapt”.

KPMG Australia surveyed more than 70 Australian fintechs – of which 11% were insurtechs – regarding revenue, funding, resources and customers, and analysed the results to highlight key emerging trends.

Head of Fintech (Australia) Daniel Teper says the record Afterpay takeover “has put Australian fintech firmly on the global map”.

"We predict successful Australian fintechs can and will continue to attract the interest of international investors and highly skilled resources alike,” Mr Teper said.

The survey says fintechs will continue the “nascent trend” of broadening their scope through embedded partnerships.

“To leverage existing customer databases and complement current offerings…an array of sectors are partnering with financial institutions,” KPMG says. "The benefit is a more holistic customer experience with meaningful opportunity to expand the products and services they offer.”

The survey also finds Consumer Data Right legislation reduces barriers to entry for smaller fintech players, encourages competition and allows fintechs to provide specialised data-rich services.

Businesses providing middle-and-back office solutions are also seeing increased demand from insurers and banks for artificial intelligence-backed smart processes.

Customer-facing applications such as intelligent chat interfaces and robo-advisers are “now maturing,” and businesses such as insurers are focusing on ensuring underlying data is fully used to optimise operational efficiency.

Almost all those surveyed are seeking to hire more local staff, which KPMG says “substantiates the considerable growth of the Australian fintech ecosystem despite talent acquisition consistently ranking among the top challenges faced by industry”.

The companies surveyed were made up of lending 16%, payments 15%, insurtech 11%, data & analytics 11%, regtech 10%, middle & back office 7%, wealthtech 7%, capital markets 5%, personal finance manager 5%, neobank 5%, blockchain 4%, and crowdfunding 3%.

Fintech investment was $3.2 billion in 2020 and $3.8 billion in 2019.