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Looking ahead – FinTech 22 / 23

We all have our eyes on the horizon and want to understand trends, anticipate business challenges and identify the future opportunity. Coming out of the Westpac sponsored Business Post budget roundtable meeting on Thursday with Minister Micheal Wood (stepping in for Grant Robinson), it is clear New Zealand/Aotearoa has weathered the pandemic pretty well, which in turn bodes pretty well for our tech sector and FinTech in particular.

The base metrics are identifying a pretty resilient economy with GDP exceeding pre-pandemic levels, and budget indications looking better than the post-GFC bounce back. We have also taken on lower debt by comparison with our peers e.g. 50% less than Australia, 70% less than the UK and 80% less than the USA. However, against strong geopolitical headwinds, supply chain issues, and the invasion of Ukraine we have more than a few challenges! The recording is here.

So why does this matter to our FinTech community and what is happening in the rest of the world to whom we want to export our FinTech innovation?

While post pandemic we can be ‘certain of uncertainty’, as a nation we can have more confidence about our tech economy knowing this sector has largely accelerated of its own accord – but has also recently been boosted with the likes of a top-up of $20M in funding targeting Digital among many others. We also have the B$2.9 to be put into the ERP (climate fund) and this will spark plenty of modified investment choices and further drive new innovation as well. See comments on this further below on the FinTechNZ Sustainability Working Group. 

However, it is our focus on building capacity for our export markets that really matters, and in particular, the time is now to build the best fit for New Zealand – and the world.

If so, how do we evaluate FinTech momentum and investments with a lens on international activity and trends?

There a number of analyst reports, but last week’s FinTech report from CB Insights, has noted three core trends to take account of at the moment summarised as;

1.Global investment is declining to pre ‘21 levels. So while the trajectory is still healthy we are no longer seeing the ‘boom blast of covid’ as growth proportionally cools. 

2.That sector funding has generally dived across the board, less so for FinTechs, than for other subsectors, particularly the Insurance sector, and 

3.M&A deals have improved (reflecting maturity in the market mostly). The plummeting volume and value of IPO’ is a reflection of the market pressures at the moment. That said, M&A deals have increased which is actually a positive reflection of maturity coming into the market. In essence, the market is becoming more normalised.

However, and  I think this is important for us, the report clearly identified some Asian economies (eg Singapore, India, Vietnam etc) and African markets are actually accelerating at pace, reflecting greater financial inclusion for mass populations who have better greater digital access and products that are easy to use, and very purposeful (eg BNPL lending) and typically low cost transacting/payment solutions that sit outside traditional banking sectors. With New Zealand only exporting 1.3% of FinTech export value to the Asian region, what can we explore here in this fast growing sector?

What can we anticipate for New Zealand/Aotearoa over the coming year?

While we may anticipate some minor retrenchment of investment and deals, perhaps reflective of the wider international marketplace noted above, actually the New Zealand FinTech proposition remains strong and is noted in recent reports. Our latest benchmark exercise will be the upcoming Deloitte/FinTechNZ Pulsecheck report in July (see below).

With growing interest in the proposed CDR legislation (due for proposed second reading towards the end of the year with possible final passing perhaps Q1, ‘23), we can see this as but one catalyst for New Zealand marketplace change. CDR opens the foundations for greater competition and the intention of developing best-fit products and services. There are many other success factors to consider of course with effective implementation the real focus for FinTechNZ over the coming years. We can look to other countries to see what has worked (or not) and get the best fit for New Zealand.

I have certainly noticed a very significant increase in international organisations (Techs/FinTechs, Investment and Trade bodies) engaging with and joining FinTechNZ clearly eyeing up a marketplace ripe for investment. You can understand why, especially given their ability to parachute in their various innovation offerings to an emerging market! This is both a risk and a very real opportunity for New Zealand and our blossoming FinTech/ Financial services industry. 

It is, for this reason, the theme for the upcoming FinTech Hui theme is  ‘Made in Aotearoa/New Zealand – For the world’

FinTech Hui ‘22 – Made in NZ – For the World: Aotea Centre, October 31

The Hui Incorporates both national and international leadership, provides curated expert content with all designed to drive insight, investment and partnering opportunity for our broader FinTech community. Now that our borders are coming down, clearly, it is time to catch up and focus on what opportunities and challenges lie ahead of us. A crucial time for our community IMHO.

The FinTech Hui landing page is going live as you read this newsletter. At this early point, we are already advancing on sponsors, developing content, and accepting advance registration interest. Do reach out to me if your company seeks to have a sector leadership role.

We have a range of topic streams including Open Banking, Investment Insurance, Payments, Wealth, Identity, Sustainability, Regtech, the new Open Finance Innovator Zone and more.

We welcome the latest Sponsor the ASX.

Upcoming Sector report launch: Deloitte/FinTechNZ 2022 FinTech Pulsecheck Open Banking report.

Establishing good data on the state of FinTech and the future has been a core focus this year. We are pleased to announce the upcoming release of the latest initiative collaboration between Deloitte and FinTechNZ presented as a member webinar and includes the download of this sector report.

We will send out the invites for this next week. Watch your inbox!

International export activity

As this newsletter was going to the wire, FinTechNZ, NZTE, and around 11 Kiwi companies were gearing up to present and/or exhibit at the Seemless FinTech conference in Dubai and curated investment meetings. Some will be skipping over to London FinTech week as well. We wish you all the best and well-done NZTE for supporting this venture!

Invest Hong Kong 

I recently met with the Hong Kong Economic and Trade Office about expanding engagement in the marketplace there. This organisation is actively seeking to welcome/invest in New Zealand companies looking to expand into Hong Kong – (and by extension China leveraging the FTA). We are exploring gateway investment/trade options, and plans to open a working bridge. The first action point is targeting the Hong Kong FinTech festival at the start of November. We can anticipate more news here. Please contact  Jason for more information.

Selling your FinTech solution to Singapore

NZTE have just released a blog on helping market access into Singapore. This is a really handy starting place with good content. For a detailed review see the NZTE section here. 

Working Groups

Sustainability Working Group

The culmination of the last couple of months contributed to a rather epic month for the Sustainability Working Group.

We engaged with Toitū Tahua, Centre for Sustainable Finance, and heard from the Chief Executive, Jo Kelly, about where they’re at and the recent launch of their Sustainable Agriculture Finance Initiative Data Project Findings Paper where they’ve conducted research in the agricultural industry to understand key data challenges and possible solutions.

Amidst government announcements on the Emissions Reduction Plan and their intention to invest $2.9bn on decarbonisation and improving our energy independence, the Climate and Sustainability Day that we hosted on Techweek TV, was buzzing with a myriad of ways that technology could be used to help solve some of these global challenges. 

We also held our own session on Useful data for reporting and mitigating climate change that was MC’d by Mitchell Pham from NZ Tech, who spoke to panellists including Jack Bisset, from the External Reporting Board, Jaime Nack, Three Squares Inc., Jo Kelly, Toitū Tahua, Centre for Sustainable Finance and Leeanna Kohn-Hardy, from finappster. The discussion focused on the data challenges seen by a wide range of industries, from agriculture to blockchain, and the promotion of the benefits of cross-industry collaboration.

Our Sustainability Working Group is also starting to form sub-groups in relation to addressing challenges in the finance industry, specifically in the data space and also in making an impact. The next step for each sub-group is to refine their respective challenges and develop a plan of activities to address them. 

In addition, we also have some exciting opportunities to participate in the FinTechNZ hui and run the sustainability stream of the Financial Services Council conference later this year. Contact me to find out how you can get involved.

BNPL working Group formation

We are 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 are on developing best-practice standards, formulating a unified focus on customer value, innovation players and more. We have currently 13 organisations expressing interest with the first meeting planned for Thursday 16 June at 3pm. If you would like to find out more contact me.

FinTechNZ, changing of the Executive Council

This month Rachel Strevens the CEO of Investr steps down from the Independent seat and hands over the reins to Adrain Smith from BlinkPay. On behalf of the team, I would like to acknowledge the awesome effort Rachel put into the board over her three-year tenure. Rachel helped out with a number of projects as diverse as the Finance committee and in particular the co-establishment of the WealthTech working group. Thanks, Rachel. 

Welcome,  Adrian Smith,  CPO from innovative Māori Tech /Fintech payments company BlinkPay. Hailing from up north and from Ngāpuhi, Adrian is a digital native who has spent 14+ years doing big bank transformation in the UK, before returning home to Aotearoa in March 2021. Previously he was a Digital Business Banking Director for Barclays Bank, where his responsibilities included core products and services, digital platforms, analytics and digital customer experience. Haere Mai Adrian.

Israel FinTech Hub

As many will know Israel is one of the Tech leaders around the world. For those who may have an interest in access to the wider Israel Tech marketplace, investment or simply seeking insight, reach out to Josh Brown (a Kiwi living part-time in both Wellington and Israel who is running a new venture called the New Zealand Innovation Hub. For more information contact Josh here or see the Website.

Partnering and Investing for success. FinTechers doing well!

This month we saw some great news exemplifying partnership and investments with FinTechs. Congratulations to Wych for partnering with the Salvation Army on their innovative fundraiser/payment app. 

And the Dosh announcement partnering with our other long time supporter Visa.

Finally we are pleased to welcome new members  

Ngā Mihi

Jason Roberts Executive Director

FinTechNZ Disruptive technologies are revolutionising traditional financial services, creating opportunities for start up entrepreneurs and corporate innovators. FinTechNZ helps connect, promote and advance the trends shaping the FinTech ecosystem.