• Mayfair 101

6 Good Reasons Why Fintech Companies Are a Great Investment in 2020

Updated: Mar 6, 2020

Anthill Magazine. 02 March 2020.

Financial technology or ‘fintech’ companies are paving the way for rapid change in the financial services and banking industries.

According to a recent report by KPMG, the biggest Australian fintech transaction and the third biggest deal in Asia recorded in the first half of 2019 was US$100 million, achieved by Australia’s fastest-grown fintech unicorn, Airwallex.

Given the amount of money transacted in these industries, it is no wonder that fintech companies can make a compelling investment proposition.

Here are six reasons why fintech companies can be attractive investments:

1. Cash is turning digital

If you think about how your spending habits have changed over the past decade and you will immediately identify the fact that more and more transactions are done without cash. Whether it is using PayPass to pay for a coffee or online banking to send money to family or friends, cash is quickly becoming a thing of the past.

Fintech companies thrive on this shift as it means more transaction volume through their platforms.

2. Data is the new oil

Fintech companies collect an enormous amount of data on customer spending behaviour. Used properly, this data can be analysed to automatically detect likely future purchases including mortgages, car loans, weddings, etc. based on prior behaviour.

This data is immensely valuable, and for many fintech companies, their data is worth more than the transactions they undertake, with giants like Facebook and Google buying data on a regular basis to improve their advertising algorithms.

3. Your mobile is your wallet

Once upon a time we all kept a physical book listing the contact details of friends and family. Now that is entirely kept on your mobile phone.

The same change is happening with your wallet – you already don’t need it. You can store your credit cards in your phone and simply tap your phone to pay for items at almost any Australian retailer.

Fintech companies are at the forefront of this shift towards a cashless and wallet-less economy. They provide technology that makes payments more efficient and give users better experiences, which is exactly what innovation is designed to do.

4. The big impact

Fintech companies can service literally millions of people without needing lots of office locations or thousands of staff. They provide services that genuinely change the way people do business for the better. They can and have reduced the black money market, helped governments collect taxes, facilitated credit to businesses and individuals in underprivileged countries, and provided a raft of services and technology that have had a global impact on the way we transact.

Few other sectors can have such far-reaching social impact as has been achieved with fintech companies.

5. Banks have a limited life in their current form

Australian banks such as Commonwealth Bank, NAB, ANZ and St George are among the most valuable companies listed on the Australian Stock Exchange, but they certainly won’t be forever.

Their customers are moving away and either banking with fintechs or non-bank alternatives, and even engaging with financial service providers for services that were previously provided by banks.

This generational shift represents an enormous opportunity for fintechs to capture a new market of customers that are fed up with slow-moving, traditional alternatives.

6. Potential acquirers have deep pockets

A key characteristic of the fintech industry is that competitors to fintech companies typically have deep pockets. These competitors are typically banks who need to acquire fintech companies in order to maintain their market share, or could be payments companies like Visa or Mastercard who are both listed companies with track records for investing in and acquiring companies.

The access to readily-available capital in the fintech space from such competitors makes it a popular industry for merger and acquisition activity.

Like all investments, the sector alone does not necessarily make it a good investment, and many other factors must be considered including management expertise, financial performance, competitors, stage of growth, exit strategy, etc. However, providing these areas are addressed, fintech companies are truly revolutionising the world and can be great asset in any investment portfolio.

»Article originally published in the Anthill Magazine. Click here to view the article.

Send us a message
Subscribe to our newsletter

Connect with us

  • LinkedIn - White Circle
  • YouTube - White Circle


This website is published by Online Investments Pty Ltd (t/a ‘Mayfair 101’) (ABN 981 34 785 890, AFSL Auth. Rep. No. 001 274 568 of Quattro Capital Group Pty Ltd (ABN 88 128 914 965, AFSL 334653)). It is provided by way of general information only, is subject to change, and may not be relied upon by any person. Mayfair 101 is an Australia-based provider of investment and corporate advisory services, including funds management, asset management, capital raising, corporate advisory, mergers and acquisitions advisory, and direct investment, either directly or through members of its corporate group. Mayfair 101’s authority under its appointment by Quattro Capital Group Pty Ltd under the Corporations Act 2001 (Cth) is limited to the provision of financial services to wholesale clients in Australia only, including general (not personal) financial product advice relating to deposit products, foreign exchange contracts, derivatives, interests in managed investment schemes and securities. Mayfair 101 and the members of its corporate group may have a beneficial interest in the financial services and products of that group. Mayfair 101 provides advice in relation to financial products of its corporate group only, and terms, conditions and risks apply in respect of such financial products. Such financial products are not a comprehensive range of all possible investment products, are not bank deposits and (like most investments) may be subject to greater risk of capital loss and negative returns than traditional investment products. Prospective investors are strongly encouraged to seek independent professional legal, financial, accounting, taxation and valuation advice before deciding whether they consider any financial products to be suitable for them, and to request any relevant disclosure documents (such as Product Disclosure Statements and/or Information Memoranda) to ensure that they are fully informed before making any investment decision. Past performance should not be relied on as an indicator of future performance. The financial products offered by Mayfair 101 and its corporate group are available to wholesale clients resident in Australia only. Mayfair 101 does not accept investment from retail clients, non-wholesale clients or residents of countries other than Australia. Mayfair 101 and the members of its corporate group are not deposit-taking institutions in Australia or elsewhere and are not authorised to conduct banking activities under the Banking Act 1959 (Cth).

© 2020 Mayfair 101. All rights reserved.