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The fintech sector has grown four times faster than the rest of the tech industry over the past decade, with further gains expected with the long-awaited introduction of open banking.
The Technology Investment Network's second annual Fintech Report indicates the sector earned export revenues of $2.64 billion in 2023.
More than half of the sector's 8857 staff were hired from overseas outpacing local recruitment by 3:1.
Despite the rapid growth, the sector was yet to realise the gains offered by open banking, which had been held back by the lack of consumer data right legislation in New Zealand, despite being identified as a priority in 2019.
"The fintech sector will be relieved to see the Customer and Product Data Bill take its first legislative steps," report author Alex Dickson said.
The bill to support consumer data rights was still winding its way through the parliamentary legislative process.
Minister of Commerce and Consumer Affairs Andrew Bayly said open banking would improve productivity and competition.
"Open banking represents a paradigm shift, unlocking the potential for personalised financial services tailored to individual needs," Bayly said.
"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."
Report highlights
- NZ's fintech sector has a 10-year compound annual growth of 32 percent - four times higher than the tech industry as a whole.
- Five-year compound annual growth is 24 percent, and the sector grew by 27 percent or $554m in the year to June 2023.
- Eighty-four percent of revenue was generated overseas last year, up 28 percent or $486m for a total of $2.2b, with growth driven by strong performances across North America (up 26 percent), Europe (up 29 percent) and Australia (up 30 percent).
- Total fintech revenue grew from $160m in 2013 to $2.64b in 2023.
- The number of NZ fintech firms with more than five million in revenue has more than tripled to 23 over the same period.
- Annual fintech investment peaked at $186m in 2022, but funding fell 89 percent in 2023 to $21m as deal volume halved.
- Of the $372m total capital raised in the last three years, $224m was from deals led by overseas investors.
- Fintech firms outspend their peers on R&D, with 20 percent of total revenue ($517m) dedicated to developing new products, services, and markets, twice as much as the tech industry's 10 percent average.
- Eleven multimillion-dollar NZ fintech firms have sold to offshore interests in the last six years, including: SLI Systems, FNZ, TALKINGTECH, TSG, Unimarket, Timely, Vend, Plexure, Hatch, Invenco, and Pushpay.
