Kiwibank Fintech Accelerator first step into growing NZ fintech sector

Financial technology like mobile payments is changing the way businesses and individuals manage their finances.
ARND WIEGMANN/REUTERS

Financial technology like mobile payments is changing the way businesses and individuals manage their finances.

The country's first fintech accelerator programme is underway to help grow New Zealand's share of a $1 trillion global opportunity.

Between 2008 and early 2015, investment in financial technology, or fintech, companies increased from US$930 million (NZ$1.3 billion) to more than US$12b, according to a report by consultancy Accenture.

Global investment in fintech ventures reached NZ$5.3b in the first quarter of 2016, an increase of 67 per cent over the same period last year.

Once positioned as the arch nemesis of traditional financial services, fintech companies are increasingly working with banks to change the way people experience financial products and services.

New Zealand's first fintech accelerator has started in Wellington.
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New Zealand's first fintech accelerator has started in Wellington.

READ MORE: Overseas 'fintech' businesses that will shape the way you use money

It is with this background that New Zealand's first fintech accelerator programme launched with Kiwbank, Xero, Mastercard, Callaghan Innovation and Creative HQ. 

Nine teams in total - seven "external" startups, one team from Kiwibank and one team from Xero - are taking part in the 14-week programme based in Wellington.

At the end of the programme the teams will pitch for investment.

Kiwibank digital advisor Peter Fletcher-Dobson said fintech was a $1 trillion global industry that could hugely benefit the New Zealand economy.

While the New Zealand banking system was fairly advanced compared with the United States, where people still used cheques, New Zealand lagged about three to four years behind the US in fintech.

​Silicon Valley, London, New York, Johannesburg and Tel Aviv all had strong fintech growth, whereas New Zealand still did not have the right ecosystem.

A national fintech organisation only recently launched with the backing if NZTech and the Government.

​"The irony is we have had a company like Xero coming out of Wellington, but we haven't had the ecosystem of support from the bigger players in the financial services," Fletcher-Dobson said.

"For New Zealand, there's obviously the economic opportunity around being a real player in a global pool. It's a $1 trillion opportunity. Even if we get a sliver of that, that could be transformational to the New Zealand economy."

Fletcher-Dobson said therefore, an aim of the accelerator was to build a supportive fintech ecosystem that offered investment, capital and mentoring.

He said the Kiwibank accelerator programme teams were "on the money" with their business ideas and were comparable to overseas counterparts.

These are some of those businesses:

SHARESIES

For many New Zealanders the words "fun", "easy" and "affordable" are not readily associated with investing and the founders of Sharesies want to change this.

Investment platform Sharesies was co-founded by Brooke Anderson, left, Leighton Roberts and Sonya Williams to make ...
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Investment platform Sharesies was co-founded by Brooke Anderson, left, Leighton Roberts and Sonya Williams to make investment accessible and fun.

Sharesies is an investment platform where users can make investments with small amounts of money.

Coming from a banking background, chief executive Brooke Anderson saw firsthand how bad Kiwis were with saving money and how little people understood about investing.

A lack of awareness around investing was one of the top barriers to entry, with many people still seeing home ownership as the ultimate investment, she said.

But home ownership was becoming less and less attainable, so the challenge was to find other ways to help Kiwis have access to investment.

Anderson and her co-founders have just finished customer research and will be looking at teaming up with regulators as the next step.

The ultimate goal was to democratise investing so all Kiwis had the same investment opportunities.

"We want someone with $5 to have the same investment opportunities as someone with $50,000," Anderson said.

She said the idea had the potential to be highly disruptive, but also one full of potential as it could help create entire generations full of highly financially literate people.

Once the platform officially launches, the company would look at heading to Australia, the United Kingdom and potentially Asia.

INVESTFUL

When Andrew Montague started working at the NZX as a programmer, he struggled to remember where his Kiwisaver was located and had no idea how much was in it.

Investful co-founders Andrew Montague, left, and Carl Douglas left the NZX to start their fintech business.
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Investful co-founders Andrew Montague, left, and Carl Douglas left the NZX to start their fintech business.

After a bit of research, he was shocked at the fees he was paying for it.

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Montague was not the first, nor would he be the last, person to be confused about his investments, but he wanted to do something to help others be more informed.

He set up Investful with a former NZX colleague, Carl Douglas, with the aim of building a platform that would help Kiwis get access to fair financial advice.

Once finished, the Investful platform would assess a user's risk profile and financial goals and then help build a portfolio based on that profile.

The platform will also be able to help rebalance the portfolio throughout the year.

Pricing will be based on membership, rather than how much money a person had.

"We want to make sure Kiwis, Australians and people overseas have affordable access to sophisticated financial tools. We don't believe those systems and platforms are just for the wealthy or even just for the middle-class," Montague said.

"There's a lot of room to help people access their financials and have a better understanding of what their wealth is doing for them; not just what they're doing the banks."

Montague was confident Investful could compete on an international scale and said its small size was an advantage against larger corporates.

The plan was to enter Australia and South East Asia in the next 12 to 18 months.

FLATFISH

The likes of Trade Me and Facebook have made finding a flat easy for renters, but what about the owners of those properties?

Florian Saenger, left, and Tal Meser set up Flatfish after hearing about the struggles landlords had in managing their ...
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Florian Saenger, left, and Tal Meser set up Flatfish after hearing about the struggles landlords had in managing their properties.

Landlords spend vast amounts of time and money managing their properties or outsourcing responsibilities to a property manager.

This was where entrepeneurs Tal Meser​ and Florian Saenger saw their startup Flatfish stepping in.

The on-demand platform allowed landlords to have maintenance, inspections and rent collection done when they want it.

Users signed up for free and paid only for what they used. For example, a tenant could submit a maintenance job on the platform, the Flatfish trade network would provide a quote and the landlord simply accepted the quote.

The tenant and tradie could then schedule a time that worked for them on the platform and the landlord would receive a report how the job went.

"Our vision is to enable landlords and tenants to rent happy all over the world," Meser said.

"We see a very bright, technology-enabled future for landlords. Imagine a future where landlords can travel the world, spend time with their family and enjoy their weekend without the stress of urgent maintenance."

ACCOUNTINGPOD

All the business tools in the world are no good if people do not know how to use them.

Accountingpod's XingDong Yan, left, Judith Cambridge, Tim King and Michael Ng are developing a platform to change the ...
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Accountingpod's XingDong Yan, left, Judith Cambridge, Tim King and Michael Ng are developing a platform to change the future of financial education.

Enter AccountingPod, whose aim was to deliver fun financial education targeted at the future of work and business, focusing in particular on small businesses and tertiary institutes, through the use of real data from real businesses.

Chief executive Judith Cambridge and co-founder XingDong Yan are both chartered accountants and have seen the importance of good education among small business.

Much of the time Cambridge said business owners used just 25 per cent of a business product's capabilities.

They often encountered misunderstandings around how the tax system worked, what profit was, what cashflow was.

"A typical question from a client was, 'Why have I got tax to pay when I've got no cash?'," Cambridge said.

With the rate of change taking place, business education needed to keep up and Cambridge said the use of real business data was one way of re-imagining financial education.

Two pilots of Accountpod have already run at Waikato University and Otago Polytechnic and the goal was to take it global.

 - Sunday Star Times

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