Australia becomes second largest alternative finance market in the Asia-Pacific

fintech — People are seen in the Level39 FinTech hub based in the One Canada Square tower of the Canary Wharf district of London, Britain, August 5, 2016. Reuters/Jemima Kelly/File Photo

Australia has become the second largest alternative finance market in the Asia-Pacific. The nation’s market rose more than 50 percent over the last year, a KPMG, Cambridge Centre for Alternative Finance and Australian Centre for Financial Studies report has revealed.

The report states that Australia is fast becoming a regional leader, next to China. Research team from the Cambridge Centre for Alternative Finance, the Australian Centre for Financial Studies at Monash Business School and the Tsinghua University Graduate School at Shenzhen conducted the study, in collaboration with KPMG and support of the CME Group Foundation and HNA Capital.

Alternative finance provides new business models for lending and other forms of finance such as peer-to-peer lending, crowd funding, balance sheet lending and invoice financing. The report reflects the positive impact of the government’s FinTech agenda in making the country a global FinTech hub.

The report’s findings reinforce Australia’s leading global position in the use of FinTech. It also confirms the hard work by those in the sector and shows the actions of the Turnbull government to support the Australian FinTech sector.

The report is based on a survey of over 600 online alternative finance companies across the Asia-Pacific. It revealed that Australia’s finance market has grown 53 percent over the past 12 months to become the second largest market in the region.

Long-term growth of the alternative finance market is said to depend on regulations that strike a right balance between ensuring consumer protection and encouraging financial innovation. The report shows positive attitudes on Australia’s regulatory settings as about two thirds of respondents consider the nation’s regulations to be appropriate and adequate.

The study also highlights how alternative finance is growing rapidly, although it remains as small as a proportion of overall credit outstanding in the financial system of several countries. The market also continued to grow across the Asia-Pacific region last year. China is the global alternative finance market leader accounting for 99.2 percent of the total Asia-Pacific market.

Since March 2016 when the FinTech statement was released, the Turnbull government has moved to ensure that the country has the appropriate policy setting in place. This would make it easier for FinTech businesses to succeed. Last week, the Turnbull government introduced further legislation into the Parliament to further support the FinTech sector in becoming a world leader by extending the crowd sourced equity funding framework to proprietary companies and removing the double taxation on digital currency.