In a report KPMG authored (and commissioned by The Committee for Sydney and NSW Trade & Investment), Unlocking the potential: the Fintech opportunity for Sydney, last October it was noted that a lack of a dedicated working space has not stopped innovation in financial services. Start-ups have still been collaborating in fintech ‘Meet ups’ and other relevant industry events, such as conferences, pitch fests and hack-a-thons for some time now. But it does make it harder to bring these start-ups to the attention of investors, relevant government agencies and regulators.
For fintech start-ups to compete, thrive and lead on a world stage a physical fintech hub is a critical enabler. A physical hub provides a location for collaboration between start-ups, financial institutions, technology companies, leading academics and universities, government and regulators to occur. It provides a ‘centre of gravity’ for fintech.
Bringing these groups together will also help cement Sydney’s aspiration to be the heart of fintech in Australia, and the Asia Pacific.
Yesterday’s announcement of a physical fintech hub location – at level 26 of 45 Clarence Street in Sydney CBD – is a milestone achievement for the sector. Stone and Chalk, as the new fintech hub will be known, has strong support from both government and private enterprise and will drive more collaboration, more innovation and a healthy degree of competition.
Opportunities for collaboration outside of the fledgling fintech community are vital if fintech innovators are to reach their commercial potential. Many great ideas and start-ups fail because they lack commercial acumen and even more importantly, capital to expand. A single physical hub will make it easier for start-ups to access early stage funding, with investors able to access a strong pipeline of opportunities in an environment backed by both business and government support.
Stone and Chalk is a cross industry initiative structured as an independent and not-for-profit entity, modelled on arguably the world’s leading financial services technology hub Level39 at Canary Wharf, London. The objective of the space is to provide low cost services (such as subsidised working space), expertise and mentoring, as well as access to capital for start-ups.
When doors open in June, Stone and Chalk will accommodate up to 150 entrepreneurs through hot desks, fixed desks and offices plus drop in spaces, as well as offer events space to host seminars, industry meetings and conferences. Corporates will also be able to rent space in order to co-create and innovate with start-ups and other partners.
In making Stone and Chalk a reality, a Working Group of senior stakeholders across industry, the start-up community, Committee for Sydney, and NSW Trade & Investment have ‘walked the talk’ of the collaboration model, working tirelessly together, with significant volunteering of time and effort.
Global investment in fintech has grown from less than $930 million for the whole of 2008 to over $1.04 billion in the month of October 2014 alone , but Australia has lagged behind in providing a co-ordinated approach to fintech start-ups and until now has largely missed out on the disruptive opportunities they provide.
As financial institutions rely more and more on digital technology, shaping everything from customer service expectations to the way individuals will choose to interact with their bank, the opportunities with these fintech disrupters will grow.
Stone and Chalk is a hugely positive move for fintech start-ups and we’re confident we’ll see new business models and improved services for consumers emerge as a result in the years to come.
Ian Pollari is the Head of Banking for KPMG Australia and Chair of the Key Stakeholder Working Group
James Mabbott is Director Financial Services at KPMG Australia and a member of the Key Stakeholder Working Group
Press Release: Sydney’s Fintech Hub gets real
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