Fintech not been forgotten, massive missed opportunity on AI

While the Australian government's 2023 Budget clearly focuses on cost-of-living relief, fintech, and the innovation it can deliver to Australians, has not been forgotten, according to Rehan DAlmeida, General Manager at FinTech Australia.

"The Government is providing funding to establish an Industry Growth Program to support Australian SMEs and startups to commercialise their ideas and grow their operations. This targeted funding will help early-stage fintechs weather difficult market conditions and continue to grow," DAlmeida says.

"We are pleased to see almost $90 million of new funding to support the operation of the Consumer Data Right, uplift cyber security and progress the rollout of action initiation. 

"This is yet another cost-of-living measure in disguise, as when fully operational the CDR will spur on competition in energy, telco and banking services. The CDR is at a crucial point in its rollout and the Government playing a central and supporting role is more important than ever. It is a transformational reform which is yet to reach its full potential."

DAlmeida says access to talent remains a significant challenge for Australian fintechs.

"In last year's FinTech Census, 85% of companies reported it as one of the greatest issues affecting the sector. Measures to improve visa processing times, improve pathways to permanent residency and invest in strengthening STEM skills are positive steps towards addressing this issue.

"Finally, the Government's new Sustainable Finance Agenda aligns with a growing trend of fintechs incorporating sustainability and positive impact into their business models," he says.

"Ensuring integrity in sustainability claims and developing a new sustainable finance taxonomy will make it easier for fintechs to adopt these approaches."

Meanwhile, Barb Hyman, CEO and founder, Sapia.ai, says the government has missed a massive opportunity on AI that will be too late to correct.

"This is a massive missed opportunity from the Federal Government to surge ahead in what is fast becoming the race to not only pioneer but leverage new AI technologies," says Hyman. 

"In the US, Federal Government spending on AI is expected to hit $3.3 billion this fiscal year. In Australia, we have just allocated roughly $20 million per year, for five years, split across AI and Quantum Computing.

"It's reasonable that this isn't a budget for the tech sector, or innovation, given the sharp focus on cost of living. On any other topic, it's right not to complain when thousands of Australians will be better off due to funds put towards welfare and support.

"But we can't stress enough -- as an AI company ourselves -- this innovation is time-sensitive," Hyman says. 

"By the time it's a focus globally, it will be too late. There is a reason companies like Google, Amazon and Microsoft aren't slowing down their progress despite ongoing debate on the power and ethics of AI.

Even something as simple as putting funding towards integrating AI into government processes, or drawing policy for its adoption would be a step forward. No doubt this may be revised in next years budget, but by then it may be too late."

Des Hang, Co-founder and CEO, Carbar, says the budget hits the broad strokes, but is the funding enough? 

"This is a Federal Budget that hits all the broad strokes incredibly well, covering all the bases for emerging business more so than its predecessors," says Hang. 

"Every notable issue is getting a mention. But it's questionable if the funding tied to delivering progress on them will be enough.

"With EV policy, for example, only a mere $1.3 million per year is being committed towards creating a national EV infrastructure mapping tool. Around $1.8 million per year will be used to introduce fuel standards. Given the fanfare a few weeks ago regarding the national EV policy, we expected these figures to be higher and more of it to be cost.

"Yet, in an interesting contrast, over $2 billion has been committed towards the hydrogen industry. As an active participant in the EV industry, it does make me wonder where the government is hedging its bets on the future of mobility, as well as creating a new export market for the country."

Adam Milgrom, Partner, Giant Leap, says impact investing has clawed its way into the budget, and says, "let's hope future ones expand on it."

"Over the past few years, we have observed a shift in how startups are perceived in the broader business landscape. They have evolved from being categorised alongside small businesses to being acknowledged as a distinct entity in the Federal Budget," he says.

"It's fantastic to see that terms such as "impact investing" and "utilising business to tackle societal challenges" have rightfully gained prominence in the budget, reflecting their growing significance across the business world.

"While it is heartening to see these topics being recognised in the Federal Budget, it is crucial to acknowledge that the allocated resources may not be commensurate with the potential impact of our industry," Milgram says.

"The presence of these themes in the budget serves as a foundation upon which future conversations can be built, and we are optimistic that subsequent budgets will increasingly prioritise and support the impact investing sector.

"We firmly believe that a continued focus on impact-driven startups will accelerate economic growth, job creation, and positive social and environmental outcomes," he says. 

"At Giant Leap we are committed to championing this cause, and are hopeful that the Federal Government will recognise the immense potential of our industry and allocate the necessary resources in the years to come."

Jose Barroso, General Manager, ANZ, Zai says SMEs are also suffering cost of living pressures.

"We are delighted to hear of a Budget surplus, and finally see some relief for renters, single parents, and jobseekers as well as some support for Australian businesses," he says.

"However, it's important to note that the SMEs that employ so many Australians are still facing significant challenges, particularly as their customers are hit by ballooning interest rates designed to discourage them from making purchases.

"Despite these difficulties, fintech businesses like Zai are continuing to support customers by absorbing inflationary cost increases and investing in next-generation payment solutions like PayTo," says Barroso. 

"These innovations help SMEs reduce the cost of accepting online payments and keep their cash flowing to support their local suppliers and employees - for example, PayTo requested payments can arrive to their bank account seconds after their customer authorises it via their preferred Internet or mobile banking option."