In the last week the Prime Minister and a cross-party delegation of political leaders and trade and industry representatives (including FinTech companies) completed their trip to Singapore and Japan. This was an important first step in sending a message that we’re back and open for business after being stuck inside fortress New Zealand for the last two years.
We are now in a state of racing to catch up with both established – and emerging FinTech marketplaces that represent significant opportunities for scalable, weightless exporting, ripe for exploitation.
But a note of caution on expectations.
While we have been keeping safe, other markets have reopened and are also growing at pace with New Zealand, risking an uphill battle to regain lost momentum. While the FinTech 100 report released last month identified that the top 100 New Zealand FinTechs grew a whopping 32% in the last year and are a clear leading sector of interest, this is but a fraction of not only the global market, but indeed of New Zealand’s potential.
The international FinTech Market is growing at an exceptional pace, and for what is still a relatively infant market. Just looking at FinTech investment in the last year CB insights report identified a 170% increase in funding and investment along with over US$131B, Mega round investments and a 200% increase in deals. Another lens on this is from FT partners who identify $US144B and project this year to easily exceed this, with stand out investor groups like Sequoia and Tiger Global. However, these figures pale in comparison to the UK FinTech Sector which last year reported a 700% Year on Year increase in funding.
So against this backdrop of fast growth what is the message for our small country?
Here are some of my thoughts;
- We can’t risk becoming myopic and satisfied with our current growth trajectory. We have to get back out there and reconnect with the world.
- We must identify current, and future markets by re-engaging in person as well (more on this below).
- We need to develop a growing volume and pace for emerging FinTech Startups and Scaleups to develop, partner and scale international growth. This is not only good for our ‘Made in NZ – For NZ and the World’ FinTech community, but also creates a vastly greater momentum of sales and export value for us all.
- We have to keep the accelerator down on partnering across the sector – for the benefit of all. It is pleasing to see a number of new acquisitions and agreements this month for our members for example Kiwi FinTech Yonda launches extended partnership with Equifax and also the partnership between Yodlee and WeMoney.
- There is certainly rapidly growing interest in the New Zealand Market place from international Tech and FinTech companies. We should welcome international competition, investment and FinTech innovators into the market. Yes it is a challenge for some, but their participation (and competition) will actually accelerate the whole sector. FinTechNZ has had a rapid increase in interest from international FinTech and Tech companies eyeing up the New Zealand market – and for good reason.
- The impact of the rise of Open Finance opportunity is likely to be accelerated by pending CDR legislation, with the anticipated passing in the house (as indicated by Minister Clark at our Report launch) for October/November this year. However, I suspect we will see greater cross sector collaboration before this. The CDR legislation is by no means a panacea for market change, but rather a factor in change, which will of course still take some time to come through in policy and practice.
- We need to focus on particular markets already quite well supported such as Australia, North America and UK, but also those other fast growing sectors where we have support and investment from NZTE especially Asia and Middle East/UAE (see report). More on these very points below.
FinTechNZ – International focus is a part of your FinTech’s Board Strategy
How is FinTechNZ helping you rise to the challenge?
As you may have seen we have been actively supporting sector insight. Following the Open Finance and Tin100 FinTech reports, we are also in the process of working with Deloitte to develop the Open Finance Pulsecheck report. This is in data-gathering mode now, in advance of its FinTech Sector delivery in July. We urge those who have an interest in the direction of the market to participate in this survey which you can do here, it is open until 4 May.
FinTechNZ is partnering with NZTE to support Kiwi FinTech focused companies to gain insights, share their proposition and open up market opportunities into the Middle East region. This fast emerging region is diversifying and focusing on the Tech sector and in particular FinTech. It represents a gateway to investment and scaled growth into the Middle East, Europe and Africa in particular. Indeed one of our well known Kiwi FinTech’ers and Entrepreneurs Leigh Flounders is currently leading one of Africa’s fast growth FinTech’s called NowNow.
Seamless Fintech conference in Dubai – special offer for FinTechs
With the support of NZTE and with FinTechNZ’s collaboration, all FinTech members have the opportunity for a supported delegation to Dubai for the Seemless FinTech conference on May31 – Jun 1, and additional market engagement wrapped around this event. Seamless is a global 2-day conference covering the latest trends and technologies shaping the payments, fintech, retail and e-commerce world.
It features 300+ speakers, 1000+ attendees annually and is a key meeting place for leaders and start-ups in the fintech industry that are either seeking investment or looking for new business partnerships.
Seamless ME is working with NZTE to offer Kiwi start-ups the opportunity to obtain: Logo and profile listing (on Seamless ME’s event website), Unlimited stand staff passes, 1x premium conference pass, Networking platform access, Digital seminar presentation (loaded on the event app), the opportunity to apply for start-up stories presentation, the opportunity to apply to enter any related event start-up pitch-offs.
The conference already has two Kiwi FinTechs on the main stage (Velocity and Roam Digital), and possibly myself on a panel, but more importantly a special offer for start ups. To qualify for the complimentary start-up pod the general principle is that you need to be less than two years old and less than $1m in revenue. Time is running short so if you want to leverage this opportunity contact Jason directly here.
Virtual Roundtable with the Lord Mayor of London delegation
On Wednesday the British High Commission led an event focusing on expanding UK business interest in the FTA. While much of the now ratified agreement is on primary industry, there are three areas for New Zealand Financial services companies to consider.
Investment: The investment provisions incorporate modern investment protection rules similar to those contained in other recent FTAs. This will help to create the conditions for further growth and development in two-way investment.
Financial Services: The investment provisions incorporate modern investment protection rules similar to those contained in other recent FTAs and provide certainty of access and regulatory conditions for services exporters. This will help to create the conditions for further growth and development in two-way Investment, and a range of obligations relating to trade in financial services among others this includes insurance banking and other financial services transfers.
Sustainable Finance: Among the new areas covered were Sustainable Finance and recognising the value of diversity in particular.
Following on from this is UK Tech week and FinTech London in June/July. We are pleased to hear from UKDiT and NZTE that there is a good delegation going up to UK Techweek for the trade mission and includes a number of FinTechNZ member companies. While the London FinTech week is not directly supported by this NZTE and UKDiT collaboration it is a handy ‘clip-on’ to a string of events and delegations starting with Dubai at the end of May.
A couple of weeks ago we had our first three-way webinar between Singapore, Chile and New Zealand with the goal to improve bilateral trade and opportunity in these markets. It was an excellent session and there is a lot of interest to do more here both in terms of market understanding- but also at an individual Fintech country level, to expand information and opportunity.
FinTech Hui ‘22
We are delighted to announce that FinTechNZ, along with lead sponsors, will be hosting the long-awaited FinTech Hui, this year to be held at the Aotea Centre on October 31st with a VIP dinner experience following. The broad theme will be a focus on Open Finance, sharing international market insights, accelerating investment, partnering and international market development and much more. We are planning to incorporate optional streams on Open Banking, Insurance, Payments, Wealth, Identity, Sustainability, Regtech, with a FinTech Alley concept, Exhibitor stands and more.
The feedback from last year’s Hui amplified the focus and value of holding an intimate, leadership-focused format with high-value content. We will repeat and enlarge this format, bring in more international insights and amplify the opportunity to really drill down on forging leadership for the sector.
We are currently inviting expressions of interest for both sponsorship and content, welcoming your input. Contact Jason in the first instance.
The Sustainable FinTech Working Group is going full steam ahead since their first formal meeting at the start of the year. It now has newly defined group focuses. These look to address challenges in the spaces of data and impact.
To get the group into the right headspace and refine these focuses into objectives, they heard from Jaime Nack, the President of Three Squares Inc., an award-winning sustainability and ESG consulting firm. TSI specialises in creating impactful strategies for governments, corporations, global events, and non-profits.
Jaime shared her experience of a project with Universal, Warners and Sony that she had been involved in. Her emphasis on industry clarity and no surprises reinforced the benefits of working together.
Co-chair of the Sustainable FinTech Working Group, Mitchell Pham, has also been championing sustainability, having recently set up a sustainability sub-board under NZ Tech, and hosting a Climate and Sustainability-themed TechWeek TV day on Wednesday 18 May.
BNPL working Group formation
We are also forming a provisionally named BNPL (Buy Now Pay Later) Working Group which includes aspects of the Unsecured lending marketplace across the sector. The broad agenda and focus is on developing best practice standards (possibly also regulation), formulating unified focus on customer value and more. We have the participation of the leading players in New Zealand and Australia, and likely other countries.
The first meeting is planned for Thursday 16 May at 3pm. If you would like to find out more contact Jason.
Finally, Techweek is coming. We have a couple of events that are FinTech related on Techweek TV discussing sustainability and Open finance, and also FinTechNZ member Inland Revenue will be presenting Tax Administration in the Digital World.
We are fortunate to all participate in such a thriving industry sector!
Keep up the good work everyone.