New Data Reveals Momentum Of NZ Fintech On Eve Of New Open Banking Rules

AUCKLAND, 24 MAY 2024 – Technology Investment Network has today released the second edition of the New Zealand Fintech Report, quantifying what is now the country’s largest and fastest-growing tech-export sector, with global revenues of $2.64B.

The report, launched at Amazon Web Services Auckland yesterday as part of NZ Techweek24, provides an update on data from TIN’s 2023 New Zealand tech sector survey, including longitudinal growth, key markets, investment, and business spending trends.

“NZ’s flourishing fintech sector has been a stallion in sluggish economic times; it’s now the country’s largest tech export sector as well as its fastest growing. A decade ago, fintech revenues totalled about $150m, today we’re talking about a multi-billion-dollar earner, comparable to the wine industry in terms of value,” said report author Alex Dickson.

“This rapid growth is validated by interest from global dealmakers, both in terms of investment into the sector and acquisitions. The sector has seen half a billion dollars of investment over the last six years, while eleven of our most bankable multi-million-dollar fintechs have sold offshore in that time.”

“New Zealand’s been at the front of the pack on banking computation, EFTPOS and internet banking, and has since become highly proficient in developing paytech and enterprise solutions for small business. However, the next wave of innovation will come from open banking, and we’re about seven years behind on that.”

“The fintech sector will be relieved to see the Customer and Product Data Bill take its first legislative steps.”

Andrew Bayly, Minister of Commerce and Consumer Affairs said:

"The future looks bright. Open banking represents a paradigm shift, unlocking the potential for personalised financial services tailored to individual needs. Not only will consumers benefit, but small and medium enterprises will gain access to new products and services that will increase productivity and enable them to grow their businesses."

Key insights from the Report include:

• NZ’s fintech sector has ten-year compound annual growth (CAGR) of 32% – four times higher than the tech industry as a whole. Five-year compound annual growth is 24%, and the sector grew by 27% or $554m in the year to June 2023.
• Eighty-four percent of revenue was generated offshore in 2023 for total export revenue of $2.2B, up 28% or $485 on the year prior. Growth was driven by strong performances across North America (up 26%), Europe (up 29%), and Australia (up 30%).
• Total fintech revenue has grown from $160m in 2013 to $2.64B in 2023. The number of NZ fintech firms with over five million in revenue has more than tripled to 23 over the same period.
• More than half of the sector’s 8,857 staff are employed overseas, where hiring now outpaces local recruitment by more than 3:1.
• The country reached peak fintech investment of $186m in 2022, but funding fell sharply in 2023, down 89% to $21m as deal volume halved. Of the $372m total capital raised in the last three years, $224m was from deals led by offshore investors.
• Fintech firms outspend their peers on R&D, with 20% of total revenue ($517m) dedicated to developing new products, services, and markets, twice as much as the tech industry’s 10% average.

Copies of the 2024 New Zealand Fintech Report, which is sponsored by Xero, Worldline, Knobbe Martens, University of Waikato Management School, and Altered Capital, are available for free download here.

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