Fintech is growing four times faster than the tech industry

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The fintech sector has grown four times faster than the rest of the tech sector over the past decade, with further gains expected with the long-awaited introduction of open banking.

The Technology Investment Network’s second annual Fintech report indicates that the sector earned export revenues of $2.64 billion in 2023.

More than half of the industry’s 8,857 employees were hired from abroad, outpacing local hires by 3:1.

Despite rapid growth, the industry had yet to realize the benefits offered by open banking systemwhich had been held back by the lack of consumer rights legislation in New Zealand, despite having been identified as a priority in 2019.

“The fintech sector will be relieved to see the Customer and Product Data Bill take its first legislative steps,” said report author Alex Dickson.

The bill supporting consumer data rights was still progressing through the parliamentary legislative process.

Trade and Consumer Affairs Minister Andrew Bayly said open banking would improve productivity and competition.

“Open banking represents a paradigm shift, unlocking the potential for personalized financial services tailored to individual needs,” Bayly said.

“Not only will consumers benefit, but small and medium-sized businesses will have access to new products and services that will increase productivity and allow them to grow their businesses.”

Report key points

• New Zealand’s fintech sector has seen 10-year compound annual growth of 32%, four times higher than the tech sector as a whole.
• Five-year compound annual growth is 24%, and the industry grew 27%, or $554 million, in the year ending June 2023.
• Last year, 84% of revenues were generated abroad, up 28% or $486 million for a total of $2.2 billion, with growth driven by excellent performance in North America (+ 26%), Europe (+29%) and Australia (+29%). 30 percent).
• Total fintech revenues grew from $160 million in 2013 to $2.64 billion in 2023.
• The number of New Zealand fintech companies with more than five million revenues has more than tripled to 23 in the same period.
• Annual investment in fintech peaked at $186 million in 2022, but funding fell 89% in 2023 to $21 million as transaction volume halved.
• Of the $372 million in total capital raised over the past three years, $224 million came from deals led by foreign investors.
• Fintech companies spend more than their competitors on research and development, with 20% of total revenue ($517 million) dedicated to developing new products, services and markets, double the tech industry average of 10%.
• Eleven multi-million dollar New Zealand fintech companies have sold to offshore interests in the past six years, including: SLI Systems, FNZ, TALKINGTECH, TSG, Unimarket, Timely, Vend, Plexure, Hatch, Invenco and Pushpay.

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