While the UK has been cemented as a global fintech hub, Australia has gained its own status as a destination for fintechs to expand and thrive. Each recognising the potential in the other, the two countries have shared success and facilitated growth through
exchange through the UK-Australia Fintech Bridge established in 2018, and the
UK-Australia Free Trade Agreement (FTA) which entered into force in 2023.
A recent development in British and Australian collaboration is a
new visa scheme that has been implemented for fintech innovators to migrate to Australia under the FTA. 1,000 visas will be available in its first year of operation, and 2,000 in its second. The first round of applications will close on 12 February 2024.
This
Innovation and Early Career Skills Exchange Pilot (IECSEP) helps participants who work in various industries including financial services and technology to find placement down under in either: the Early Careers Skills stream, for younger participants to
transfer for a year; or, the Innovation stream, for experienced workers to work for up to three years in Australia.
After
speaking with Karta, an Australian fintech committed to sharing its gift cards with the world and starting with the UK, Finextra spoke with CEO and co-founder of Sydney-based fintech Monoova, Christian Westerlind Wigstrom.
Monoova is a payments automation platform that was founded in 2017. While Monoova is not consumer-facing, the company operates behind-the-scenes and facilitates roughly 1% of Australia’s real-time transactions. Payments processors like Monoova enable account-to-account payments by giving businesses access to payment rails via an API.
Westerlind Wigstrom notes that expansion is on the horizon for Monoova, remarking that they are considering reaching out into the APAC region. Beyond that, he highlights the company’s focus is on forging relationships with global companies rather than conquering ground.
The company’s working strategy is to form an international ecosystem of clients to offer them access to Australia and open up pathways to further regions.
Commenting on how the UK-Australia FTA impacts the growth of the company, Westerlind Wigstrom states that it has not yet affected their operations, but is prospective in the future. He explains that while the UK-Australia Fintech Bridge bolstered trade and opportunity
for partnership, the FTA has since inspired a spirit of collaboration that is likely to come into fruition soon.
Westerlind Wigstrom mentions that Monoova is currently in talks for two UK initiatives, and two continental European manoeuvres to bridge the gap between Australia and companies abroad.
“While Australia and the UK almost infinitely far away from each other, the links are still so large. In Australia, the largest immigrant group are still Brits. With the long shared history and culture and all, making connections in the UK is maybe a particular
interest to us because of those things.”
Westerlind Wigstrom outlines that the benefits of growing a business in Australia is the fast track to growth, availability of resources, and supportive atmosphere of people that might not be prevalent in other markets, such as the US. He adds that there are fewer
players down under compared to the bustling market in Europe. Also, Australia has a more consultative and active regulatory environment that embraces a more collaborative approach, asking for more feedback from the banking and fintech industries and taking
in input more so than other global regulators.
“Australia is a sophisticated, well developed market with large ambitions and opportunities, but it's still quite a small market compared to UK’s. It has all the hallmarks of something that takes a fair bit of effort and resources to submerge yourself in,
but once you've penetrated the first hurdles and barriers to entry, all of a sudden you get into contact with a pretty large part of the economy slightly faster than you do in the UK. You probably don't need to spend quite as big a part of your expansion allocation
on Australia to make a real impact here.”
Westerlind Wigstrom comments that there is a wealth of industries that they would like to explore in future endeavours: “It's really about leading the adoption of new payments technology into a slightly more established and corporate part of the market. I often have
this image of sitting on an Australian beach overlooking the Pacific, and thinking that's an amazing blue ocean, imagining all the opportunities. When we're hungry, we fish in the lagoon next to us, because it is much easier, and that's in a particular sense
the fintech market. That is a market that is easily accessible to us. In some ways, it's a more limited market.
“It takes much longer to get away with out there in the ocean, but that's where the true opportunity is. For us, the ocean would be the established, corporate part of the Australian economy. We have started making some inroads into that section, a segment
of the market, which we are very excited about, but we are barely dipping our toes.”
Westerlind Wigstrom adds that he sees that industries with legacy payment infrastructures are seeing the benefits of working with more agile companies, and there is progress being made on that front. Monoova recently reached agreements with an airline and an insurance
company that will be using their services, and Westerlind Wigstrom believes that those agreements will lead to more similar clients and build up the appetite for digital payment infrastructure in Australia.
He continues that the fintech is working with a UK-based payments orchestration platform called Primer, which will allow businesses to choose from a variety of payments platforms and integrate access onto a singular platform. On top of that, Monoova participated
in a pilot program with the Reserve Bank of Australia (the country’s central bank) in a Central Bank Digital Currency (CBDC) initiative.
“The fintech macro-environment is looking a little bit dark and gloomy, which has had a pretty immediate impact on funding as interest rates have gone up, but really dried up funding in the last year. In terms of trends I think how we sell what we do will
move away from the world domination approach and cater towards cost control rationale for your product service.
“We help companies automate payments at huge volumes, in the millions of transactions, and one way of selling that product remains exactly the same. But another way of selling that is to say that we can help a company get from 100,000 transactions a month
to 2 million transactions a month without having to worry about payments. The other way of selling is to propose the best use of resources and integrating automation that will control costs and increase security. I think that will feature broadly in the fintech
industry.”
Westerlind Wigstrom adds that artificial intelligence (AI) is a hot topic currently and expected by many to be the next big trend, but he places it on the back burner and states that it will not be revolutionary, but instead will be a useful tool that will enhance
day-to-day services and support cybersecurity and customer service efficiency.