Speaking at the Australian Financial Review's Banking & Wealth Summit in Sydney, Financial System Inquiry panellist and Stone & Chalk chair, Craig Dunn, said fintech firms in Australia face "significant barriers".
"[They have] limited access to funding and [there is a] demand for greater government and regulatory support," Mr Dunn said.
"These are not issues or challenges that are only peculiar to our market in Australia. Every start-up in the world faces the same issues to varying degrees."
Some of the measures that could be taken by governments in Australia include lowering the cost of investing in fintech startups, Mr Dunn said.
"You could also improve the upside [for investors] by offering targeted tax incentives and the co-matching of investment funds from government," he said.
Australia could also attract more venture capital into its fintech space by increasing both the "quantum and quality of deal flow", while also lowering the search cost for investors, Mr Dunn said.
Sydney-based fintech hub Stone & Chalk, which will provide office space for 150 fintech entrepreneurs when it opens its doors in July, has a role to play when it comes to deal flow.
First of all, establishing Stone & Chalk will lower the costs of operating a fintech startup in Sydney, Mr Dunn said.
"It will also broaden the sources and the depth of supply of investable funds by enabling crowdfunding and also through more corporate venture funds ... and by getting runs on the board," he said.
"Nothing attracts more capital and new capital than success stories or successful entrepreneurs that have delivered very high returns to investors in the past."
At the same time, it is important for fintech startups to access crowdfunding to "create, refine, develop and bring new ideas to market and they do it at a much lower cost than in the past", he said.
"There are already more than seven hundred different crowdfunding sites online around the world, including a small but growing number in Australia.
"If a start-up is to fail, and many will and many do, it’s better to fail fast and it’s better to fail cheaply.
"The capacity to transfer skills in this space and for mentoring and coaching is significant – this will be a key part of the value proposition that Stone and Chalk presents to fintech start-ups," Mr Dunn said.
