The number of fintech firms has more than doubled between 2017 and 2021 but firms are being stymied by recruitment difficulties, according to KPMG.
The firm found 95% of fintechs surveyed for its Australian Fintech report planned to recruit more talent in Australia this year, mostly in the engineering/technology, sales and marketing and analyst departments.
However, only 31% said they were ‘very’ or ‘totally’ satisfied by their ability to do so in the areas they needed.
The closure of Australian borders had also caused a shortage of skilled migrants in the Australian market, presenting difficulties to hiring locally and meant 60% of respondents said they had teams overseas.
“With only 4% of those surveyed completely satisfied with their ability to recruit in their required area, concerns about a lacking labour market with shortages most certainly poses a threat to the growth of emerging fintech businesses. In addition, concerns about international recruitment and general economic performance due to COVID-19 may also be hindering business confidence,” the report said.
Fintech had also benefited significantly from funding with $10.6 billion of capital investment flowing into the sector between 2019 and 2021 from venture capital, private equity and M&A activity.
Daniel Teper, head of fintech (Australia) at KPMG, said: “As we look to the remainder of 2022, we are however starting to see some headwinds develop as the market dynamics shift, and whilst we believe this presents an opportunity for fintechs to flourish, the ability to raise capital, maintain and hire key talent, and quickly establish a sustainable business model will become more critical than ever.
“We expect that as start-ups mature, incumbents adapt and business models evolve, successful Australian fintechs can and will continue to attract the interest of international investors and highly-skilled talent alike.”
