Bridge to Australia bolsters FinTech opportunities

Australia and Scotland's FinTech businesses are perfectly game, set and matched under new initiative

The UK and Australias FinTech sectors are set to be closer than ever thanks to a budding blend of entrepreneurialism and a pioneering new initiative
The UK and Australias FinTech sectors are set to be closer than ever thanks to a budding blend of entrepreneurialism and a pioneering new initiative

Despite being thousands of miles apart, the UK and Australia’s FinTech sectors are set to be closer than ever thanks to a budding blend of entrepreneurialism and a pioneering new initiative.

And Scotland’s financial and business services sector, which adds around £15 billion to the economy annually, is no exception to this great potential both sides of the equator. Certainly, when it came to bringing his Sydney-based business halfway around the globe to a new home in Glasgow, Wayne Johnson admits there were moments of uncertainty.

“We thought we were taking a gamble,” says the co-founder and CEO of dynamic Glasgow-based FinTech Encompass. "But it has worked.

Now bedded in, Encompass is thriving in Scotland.

“In fact, it’s been a far better experience and an easier one than we expected it would be. That was largely due to the support provided by Scottish Development International. ”

Tapping into Scotland’s experienced FinTech community

Encompass made the 10,000 miles journey from Sydney to Glasgow three years ago with intentions to grow the business and tap into Scotland’s experienced FinTech community.

Now bedded in, Encompass is thriving in Scotland. Demand is strong for its software solutions, designed to make complicated yet crucial Know Your Customer (KYC) and Anti-Money Laundering (AML) checks for banking, legal, finance and accountancy businesses is on the up, and the workforce is growing.

Now bedded in, Encompass is thriving in Scotland.

Where they have led, others are likely to follow. Soon, the flow of FinTech businesses between Australia and the UK – in both directions - is likely to become a little busier.

Last month (MARCH) Chancellor of the Exchequer Philip Hammond and Australian Treasurer Scott Morrison signed an agreement that paves the way for tighter FinTech links between the two countries.

The fintech bridge between the UK and Australia

The UK-Australia FinTech Bridge will bring closer collaboration across a range of areas including government, regulators and industry bodies. For Australian FinTech firms, there will be improved access to the UK, including Scotland’s market, and the same for British businesses moving in the other direction.

The new spirit of collaboration is also intended to help UK and Australian governments to identify emerging FinTech trends and issues, enabling them to keep policies and legislation up to speed with a rapidly evolving sector.

There will be closer co-operation between the Australian Securities and Investments Commission (ASIC), Australian Transaction Reports and Analysis Centre (AUSTRAC) and the UK’s Financial Conduct Authority (FCA). This will also mean regulatory expertise can be shared among each other, and new FinTech businesses.

The Aus-UK FinTech bridge will also give scope for start-ups to explore each jurisdiction’s regulatory ‘sandbox’, so firms already licenced or authorised in their home country, may be able to access quicker licence processing at the other end.

In addition, joint projects will be carried out to spot areas which can be developed by taking a shared approach.

Overwhelmingly positive about growing a fintech from the UK

The news isn’t too surprising to Johnson – he is overwhelmingly positive about the impact of growing into the UK, including Scotland, has had on the business he co-founded with Roger Carson back in 2011.

“We had a technology that was doing extremely well in the legal market and gaining traction in the banking market,” he recalls. “We wanted to take it somewhere to mature the technology.

“We looked around the world at where we could transplant quickly and easily. The UK was obvious: similar laws, a bigger market, more mature market - particularly in banking; we have just four major banks in Australia – and with a bigger legal market.

“It was a logical transition. A lot of the significant partnerships we wanted to create were with companies that operated out of the UK or had headquarters here.

“It meant it would be easy for us to get a relatively fast start.”

A growing culture of Scottish technology and financial tech

Today, Encompass runs a 16-strong office in London which mainly focusses on financial services sales, with 32 staff in its Glasgow office focussed on technical development, professional services, sales, marketing and customer services, plus a further 27 in Sydney.

“Glasgow has proved to be excellent,” adds Johnson. “There was a growing culture of technology and financial tech, a pool of existing talent with experience and also a large number coming from university.”

Legal and regulatory similarities between the UK and Australia were another key factor, he says.

“The laws are similar,” he adds. “There was a difference in KYC compliance, but one driver to come here was that the UK is at the cutting edge for compliance technology. The UK’s FCA as a regulator is probably more advanced than most around the world, and certainly more than in Australia.

“There’s also a lot of FinTechs here taking advantage of open banking, so it was logical to make this the next point of call.”

Encompass is not the only Australian import: Computershare, a global leader in financial services and data management, was founded in Melbourne in 1978. It recently announced plans to boost its Edinburgh presence with a new technology centre that will deliver 300 jobs.

Healthy interest from Scottish fintechs for Down Under

But it’s not a one-way street. One recent event by Scottish Development International (SDI) held in partnership with Austrade, the Australian Government's trade, investment and education promotion agency, saw a healthy turnout of interest from Scottish FinTechs eyeing up opportunities Down Under.

Edinburgh-based Float, which provides an online cash management and forecasting tool that helps customers keep on top of cash flow, currently has no physical presence in Australia. However, 30 per cent of its customer base is there, thanks to its connections with New Zealand-based accountancy software business, Xero.

The business is now planning to visit later this year, to scope whether there is a potential in opening an Australian office.

According to Float’s Business Development Manager, Ben Henderson-Palmer, hopes are high that they can exploit Australians’ apparent willingness to embrace their kind of technology by having a base there.

“We’ve found that customers need a helping hand to get to the point where they are willing to trust technology,” he says. “But in Australia, the idea of things being in the cloud, and using technology in business and things like Float, is more readily welcomed.

“I’m looking forward to seeing the FinTech connections between Scotland and Australia continue to grow since it’s an important market for us.”

Want to learn more about Scotland’s growing reputation as a global FinTech hub?

Scottish Development International (SDI) is here to help. It has a proven track record in helping FinTech businesses in Scotland, offering significant financial incentives and other assistance to help establish and grow your firm in Scotland.

Graham Hatton from the SDI says: “The UK–Australia Fintech bridge will play an important role in strengthening the Fintech relationship between both countries. We’re seeing strong demand from Scottish FinTechs who are keen to explore the Australian market and also use it as a launch pad into Asia. We’ve also had interest from Australian firms who see Scotland as the ideal landing point to grow within the UK. This latest collaboration will no doubt help both FinTech communities develop.”