Australian FinTech Opens up Vast Opportunities for ICT Companies
Sydney, Australia, 23 May 2016 – Australia’s development as a leader in
Fintech innovation will require concerted effort from government agencies
and established financial institutions and will involve partnerships and
research collaboration between banks and startups. It will also present
many diverse and lucrative growth and development opportunities for ICT
companies that will help form the necessary ecosystem for a leading Fintech
market.
Data and connection security will be the most significant challenge for
Fintech companies in Australia; largely because mobile payments make up the
majority of the revenues of all the Fintech segments. Reliable security
will be a key issue and an important selling point to ensure success as
this will allow Fintechs to build consumer trust in order to grow and
compete with established institutions. Australian Fintechs need to partner
and collaborate with security vendors and ICT companies to improve the
security and connectivity of increasingly mobile-centric financial services
and to protect a user’s financial data.
Frost & Sullivan’s study, Fintech in Australia – Trends, Forecasts and
Analysis 2015 – 2020 highlights the fact that as Fintech success depends on
security vendors; and many ICT and telecommunications opportunities will be
security focussed. APAC revenues for cyber security in the banking and
finance security technology market are expected to grow at a CAGR of 7.31%
over the forecast period of 2015-2020.
Saranga Sudarshan, Research Analyst, ICT Practice, Frost & Sullivan
Australia & New Zealand says, “Established institutions already have large
security expenditures, with security systems and protocols built over many
years. Attacks against these institutions are highly unlikely and more
unlikely to be successful. However, the sensitivity of financial data,
unlike any other kind of personal data, will mean security will be a
concern at every other stage of a product’s delivery chain.”
Sudarshan added, “End-user attacks are the highest priority given that the
decentralisation of personal smart devices, whether they are wearables,
smartphones or personal computers, will make storage of end-user
credentials the most vulnerable to security attacks. Uniform security
protocols will not be implemented without significant standardisation of
operating systems and version updates.”
Biometric security will be the future of mobile security and Fintechs will
drive the expansion of biometric security. Biometric security protects an
individual’s financial data and reduces vulnerability to cyber fraud or
physical fraud as well as weak or misplaced passwords. Biometric security
will make the user themselves the strongest element in a security measure.
Frost & Sullivan anticipates that biometric authentication will be the
future of mobile security, with extensive biometric security features
developed or announced for implementation in all new smartphones over the
next 18 months.
Blockchain development for financial services has attracted various ICT
companies to develop blockchains with different revenue models. Some
companies have opted for a blockchain-as-a-service model, while others have
opted to sell cryptocurrencies. Audrey William, Head of Research, ICT
Practice, Frost & Sullivan Australia & New Zealand says, “ICT companies
involved in blockchain development include Ripple Labs with their direct
partnerships with international banks, and their Interledger project;
Microsoft and Ethereum with their EthBaaS, or Blockchain-as-a-Service
product; IBM working with Digital Asset Holdings, to develop Business Logic
Engines to embed blockchain technology into a business’s exiting
transaction systems and Intel is developing blockchain technology with
internal trials for the benefit of the Hyperledger Project.”
Analytics is one example of a software suite that is available to Fintechs
and established financial institutions. “The cloud computing capability of
Watson Analytics presents a possible model for other AI platforms aimed at
the financial services sector. AI hardware architecture is the foundation
for customised AI software, and Facebook’s Big Sur is an example of an AI
hardware architecture that allows Fintechs and established financial
institutions to build their own AI systems. Customised AI systems would
allow a range of AI solutions to compete in a market of “off-the-shelf” AI
Analytic packages,” stated William.
Data centre requirements will be unique for Fintech, and there will be huge
opportunities for data centre providers offering tailored co-location
services, managed hosting services and cloud storage. The rapid growth of
Fintech companies offering personal and business finance will present
opportunities for both wholesale and specialist data centre providers.
Telecommunications companies and system integrators have the opportunity to
offer managed services across security, cloud, data centre in areas such as
digital payments, blockchains, biometrics and artificial intelligence.
