A new document published by credit reporting agency CreditorWatch says that 2021 has been “watershed” for the local fintech industry, noting that there are now 733 fintech businesses in Australia, up from 629 at the end of 2019.

As Australia navigated its way through the COVID pandemic over the past 12-18 months, demand for digital products has grown strongly as most have turned to remote work. The Future of Fintech 2021 paper notes that as more people have gone digital, their confidence has grown so much that they now feel more comfortable using technologies that the fintech sector has been able to take advantage of.

Last month’s $39 billion acquisition of Afterpay is also seen as a key moment for the industry over the past year, which CreditorWatch CEO Patrick Coghlan says has been underpinned by a significant increase in digital technology.

"The local fintech sector has never been hotter and our Future of Fintech 2021 leadership document outlines exactly why," said Mr Coghlan.

"The paper is part of our commitment to bring new thinking to the market through thought leadership."

The paper notes that as consumer confidence in digital technology grows, cross-partnerships and major banks' interest in fintech, such as Westpac's deal with UK-based technology provider 10x, will also help improve consumer choice for banking products and services.

Moving forward, financial technology is predicted to completely transform financial services to the point where payments are likely to be instant within the next five years, while the use of cash will continue to decline and checks will be “obsolete”.

"Fintech companies play an important role at all points of the financial system," said FinTech Australia CEO Rebecca Schott-Guppy.

"They create new ways to make payments and act as gateways into the financial system."

Neil Griffiths

Neil is deputy editor of wealth titles including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.