Fintech Australia Intersekt Speech

I am pleased to be part of Fintech Australia’s Intersekt 2024.

The growth in Australia’s fintech sector - from a $250 million industry in 2015 to a $45 billion industry in 2023 – is very exciting.

In my remarks today I want to start by discussing the role of the fintech sector in driving innovation. Next I want to talk about why this matters for our economy. Third I want to point out that Labor is hostile to this kind of innovation but the Coalition takes a very different view.

Turning first to the role of fintech in driving innovation, we know Australia has a large and vibrant fintech sector, with about 830 fintech companies operating in Australia according to research from KPMG last year.  That research highlights that payments is the largest sector, with around 20 per cent of these firms involved in payments; lending is the second largest sector with around 17 per cent of the firms; and wealthtech is the third largest sector, with around ten per cent of the firms.

Many of these companies have a focus on winning customers by offering cheaper and faster ways to do things – such as making a payment or converting between currencies. For example, Airwallex is making it cheaper and quicker to convert Australian dollars into other currencies and to make payment in those other currencies.   

Last year I met with a number of the companies participating in the Reserve Bank’s digital currency trial, to learn about the various use cases they had developed for a central bank digital currency.

One project, led by fintech business NotCentralised, tested the use of digital currency to address the problem of subcontractors in the construction sector not being paid. 

This problem could be addressed by making payments in digital currency and attaching one or more conditions to the payment so that the money is automatically released when those conditions are met. 

For example, the head contractor would pay the electrical contractor in digital currency with the embedded condition that the payment is released when an independent third party, such as a certifier, issues a certificate confirming the work has been done. 

Another company, Imperium Markets, operates an exchange for buyers and sellers of bonds. Its project used central bank digital currency to allow bonds and deposits to be traded and settled instantly. Currently, bonds sit in escrow for one or two days after a trade but, if parties buying and selling bonds used digital currency, payment could be made instantly, removing the escrow period. 

But the innovations delivered by fintech players go well beyond trials; there are many companies in the market right now, using digital technology to serve customers better.  The insurance sector is one good example.

Digital insurance start up, Honey, believes that better information about customers and their risk levels lets them offer better pricing. For example, Honey provides its customers with AI-enabled smart sensors to install in their homes – allowing them to offer up to an 8 per cent discount on the customer’s premiums. 

Melbourne based Numerisk uses artificial intelligence to collate data from across the finance industry to produce 'report cards' on a single user-friendly digital dashboard. This lets businesses quickly and accurately assess the quality and risk of multiple insurance products – and in turn get the cover they need at a better price.

Melbourne based Numerisk uses artificial intelligence to collate data from across the finance industry to produce 'report cards' on a single user-friendly digital dashboard. This lets businesses quickly and accurately assess the quality and risk of multiple insurance products – and in turn get the cover they need at a better price.

In Australia, by contrast, after the Morrison Government invested over $600 million in a digital ID system, progress has slowed materially under Labor. Its recent legislation was deeply deficient and will exclude the private sector for at least two years. Sadly, this is consistent with Labor’s pattern of indifference and even hostility towards digital innovation. 

Part of the problem lies in what the current government is not doing. 

It does not have a Minister for the Digital Economy. It does not have a clear national goal for Australia to be a leading digital economy. 

We know that Australians have enthusiastically taken up service offerings delivered over digital platforms such as Freelancer, Uber, Menulog and Airtasker. The Albanese government, however, is actively hostile. The former Workplace Relations Minister Tony Burke called the gig economy a cancer. 

Labor has left the delivery of digital services by government to drift. Government Services Minister Bill Shorten has weakened the digital capability of Services Australia and in turn its customer service performance has collapsed, with Centrelink call wait times and payment processing times skyrocketing under his watch.

I am optimistic that we can greatly improve the digital experience of citizens in dealing with the Commonwealth government. You need only look at the impressive work done by the previous Coalition Government in NSW to see what is possible. Service New South Wales has become well known for its slick use of IT and digital tools, such as the apps it rolled out quickly during COVID.  

Government needs to match the user experience levels delivered by private sector organisations. According to Adobe’s most recent Global Government Digital Performance and Inclusion Benchmark, federal agency websites scored below 70 percent for customer experience.

I believe Australia’s very capable fintech industry has an important role in helping government to transform the customer service experience. 

I am also confident that the fintech sector will have a bright future should the Liberal party return to government. We have been consistent champions of the tech sector and the digital economy, going back as far as the Howard Government. We established the National Office for the Information Economy in 1997 and set up a regulatory framework for Early Stage Venture Capital Limited Partnerships in 2002.

Under Prime Minister Turnbull, our 2016 National Innovation and Science Agenda further improved tax settings for ESVCLPs, and provided additional tax incentives for early-stage investors in start-up businesses.

Under the Morrison Government we set clear goals to build Australia’s digital economy including the ambition of making us a top 10 digital economy and society by 2030 and supported this ambition with a detailed Digital Economy Plan.

I am an optimist about the technology and fintech sectors and believe they will continue to deliver for Australia and the world.  

Should we return to government, the Coalition will continue to be a strong champion of the technology and fintech sectors.  Our aim will be to leverage the potential of technology to improve the prosperity and quality of life of all Australians. We look forward to working with you!