I’m just going to come out and say it: here in the U.S. FinTech industry, we are spoiled.
We never have to travel more than half a day to get to the top conferences and events, and we have the lion’s share of the funding and many other benefits that come with a collaborative ecosystem and business culture that rewards innovation and experimentation.
However, after spending the last week in Melbourne for FinTech Australia’s Collab/Collide Conference in Melbourne, I am left wondering whether U.S. FinTech players could be missing major opportunities and leaving money on the table.
Your right room might be in a different house
Successful networking can have amazing consequences. Being in the right room with the right people can lead to profitable partnerships, new revenue streams and technologies, client bases, light bulb moments and so many other game-changing connections.
At the same time, there can also be a risk of going on ‘autopilot,’ mindlessly attending the same events with the same people with little preparation and burrowing deep into your comfort zone.
As we look to 2017, FinTech executives and entrepreneurs should challenge themselves to look further afield, particularly at the many whose products and solutions have global applicability. It can be easy in the U.S. to be inward-looking, considering the vast number of financial institutions, prospective capital backers and, of course, hundreds of millions of customers.
But according to the EY FinTech Adoption Index, Hong Kong has the highest rate of FinTech use of all markets surveyed (29.1%) with the U.S. adoption rate coming in at just over half (16.5%). In addition, FinTech hubs are sprouting around the globe in places as diverse as Berlin, Tel Aviv, Shanghai and Sydney, and FinTechs that are not building relationships in these places are missing out on great partners, insights, customers and, ultimately, revenue and profit.
“The Australian government has been very supportive of the FinTech community,” says Danielle Szetho, CEO of FinTech Australia, an organization dedicated to cultivating the financial technology ecosystem. “Federal Treasury and Regulators such as ASIC have been working closely with us to help drive a more forward-thinking, world-leading policy agenda, and address critical infrastructure gaps at a grassroots level to help Fintech startups in Australia to thrive and grow.”
“The Collab/Collide Summit, and the inaugural EY FinTech Australia Census launched at the Summit is a perfect example of that collaboration in action,” says Szetho.
In addition to governmental support, there is significant investment being made in FinTech by major financial institutions, such as the announcement by Westpac, one of the ‘four pillars’ that dominate Australia’s banking system, that it will allocate $50 million AUD to the construction of a FinTech-specific capital fund.
“Reinventure is a bold new strategy in corporate VC designed to directly address the challenges presented by banking disruption,” says Simon Cant, co-founder and managing director at Reinventure Group. “We focus on innovative technologies that can scale rapidly through knowledge sharing with Westpac, our investment partner and second largest bank in Australia. Our current principle investing theme is focused around data and AI companies like Data Republic, a platform for managing data sharing between corporations.”
“By marrying great entrepreneurs with a great partnership opportunity, it creates a win-win that advances all interests,” explains Cant.
While the U.S. will always be a FinTech hub, there is a growing trend of financial technology companies with global applications using Asia as a base to develop and grow before looking at the U.S.
“Banks in other parts of the world, in places that we in the U.S. may think of as developing nations, have had systems advance more quickly by responding to the rapid growth of mobile/digital-enabled inclusion. These growth markets have needed hyper-efficiency in a lower deposit/loan balance environment,” said Joe Salesky, award-winning banking innovation expert and CEO of global banking CRM provider, CRMNEXT.
“Most major U.S. banks have significant issues with siloed systems and channels supporting the customer. Frequently, self-service customers start a loan application online, and have to restart the process with a branch associate. Tellers and call center staff frequently need to screen-hop across systems to complete simple tasks. This friction causes lost sales, lost quality and can lead to lost customers for banks with antiquated systems.”
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