The Future of Finance: Tech-Driven for the growing Tech-Sector
Over two decades, Moneytech has evolved rapidly, establishing itself as a leading provider of lending solutions for SMEs, facilitating annual lending volumes exceeding $2.5 billion. Throughout its twenty-year journey, Moneytech has directly experienced the influence of technology on the financial application and decision-making processes.
Reflecting on the journey in the lead up to Moneytech’s 20th Anniversary in September, Moneytech Founder and Director Hugh Evans and CEO Nick McGrath believe the tech-trend of the past two decades will continue exponentially with the inclusion of more and more Artificial Intelligence (AI) processes. With hundreds of AI enabled tools already on the market, and thousands more to come, there is no-doubt AI will play a role in the future of the finance sector, but the industry will be challenged by the multitude of options to choose from while ensuring compliance, security, and efficiency for customers.
“Since Moneytech commenced in September 2003, the finance sector has been undeniably changed by technology. Responsive decision-making tools assist with real-time approvals, and quicker application to settlement timelines are now considered standard,” said Moneytech Founder Hugh Evans. “In this same time period, customers have become savvier, increasing their knowledge of how finance can help them grow their business. This is a good thing for the industry as it drives us all forward.”
Increasing exposure to AI-driven technology will accelerate change in the finance sector according to Moneytech CEO Nick McGrath. “The challenge for the industry will be to embrace AI to deliver greater value. With customers attuned to immediate, responsive engagement through their personal banking channels, non-bank business finance providers risk becoming redundant very quickly if they don’t meet customer expectations.”
Along with AI and digital transformation rapidly changing the landscape, Hugh and Nick identify Open Banking and APIs, Cybersecurity and privacy, and Alternative Lending and Microfinance as trends which will shape finance for the next decade.
Limited access to credit for small businesses is acknowledged by Nick as an industry-wide inefficiency which could be addressed more appropriately. “Microfinance for small business presents as an opportunity in the finance sector, and can potentially play a significant role in improving this segment of the economy.”
Finance for Technology-driven businesses
Tech-driven sectors, namely Green Energy, Health and Biotechnology, Fintech and Digital Finance, Supply Chain and Logistics, and Agriculture and Foodtech, are identified by Hugh and Nick as sectors which will increasingly seek finance in the next five to 10 years to fund their growth. Currently these tech-sector businesses comprise 40% of Moneytech’s business and is forecast to increase significantly in the next five years.
As a recent report outlines, the tech-sector’s economic contribution in Australia totalled 167 billion Australian dollars in 2020, and is forecast to increase to 250 billion Australian dollars by 2030. “Importantly, the largest portion of the tech-sector’s contribution came from businesses in other sectors adopting technology and these tech-driven energy, health, finance, and food sectors will continue to grow, and thus require finance to do so,” said McGrath.
More generally, The ABS’s Innovation in Business Report identifies ‘lack of access to additional funds’ as the most reported barrier to innovation by Australian businesses. “This highlights the importance of access to finance as a key economic driver across all businesses and one that maintains our commitment to assisting Australian SMEs.”