FINTECH:STATEOFPLAY

OPPORTUNITIESFORFINANCEPROFESSIONALS

AboutACCA

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Since1904,beingaforceforpublicgoodhasbeenembeddedin

ourpurpose

.InDecember2020,wemadecommitmentstothe

UNSustainableDevelopmentGoals

whichwearemeasuringandwillreportoninourannualintegratedreport.

Webelievethataccountancyisacornerstoneprofessionofsocietyandisvitalhelpingeconomies,organisationsandindividualstogrowandprosper.Itdoesthisbycreatingrobusttrustedfinancialandbusinessmanagement,combatingcorruption,ensuringorganisationsaremanagedethically,drivingsustainability,andprovidingrewardingcareeropportunities.

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AboutCAANZ

CharteredAccountantsAustraliaandNewZealandisaprofessionalbody,comprisedofmorethan131,000diverse,talentedandfinanciallyastutemembers,whousetheirskillseverydaytomakeadifferenceforbusinessestheworldover.

Membersareknownfortheirprofessionalintegrity,principledjudgement,financialdisciplineandaforward-lookingapproachtobusinesswhichcontributestotheprosperityofournations.

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WeareamemberoftheInternationalFederationofAccountants,andareconnectedgloballythroughthe800,000-strongGlobalAccountingAllianceandCharteredAccountantsWorldwide,whichbringstogetherleadinginstitutesinAustralia,EnglandandWales,Ireland,NewZealand,ScotlandandSouthAfricatosupportandpromoteover320,000CharteredAccountantsinmorethan180countries.WealsohaveastrategicalliancewiththeAssociationofCharteredCertifiedAccountants.CACatalystisourstrategicprogrammetohelpCAsbuildcapabilities,explorenewmarkets,andprovidegreatervalueforthemselves,theirclientsandcommunities.

?AssociationofCharteredCertifiedAccountantsandCharteredAccountantsAustraliaandNewZealand

May2022

FINTECH:STATEOFPLAYOPPORTUNITIESFORFINANCEPROFESSIONALS

ThisreportprovidesapracticaloverviewforaccountancyandfinanceprofessionalsontheexcitingcareeropportunitiesopentotheminFintech.AlltheIndividualsprofiledwithinthereportaremembersofACCAorCAANZ.

4

Foreword

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5

Contents

Executivesummary6

Globaldatasummary

8

1.Introduction

9

2.Settingthescene

11

2.1Diverseandgrowing

11

2.2Competitivedynamics

14

2.3Roomforinnovation

15

2.4Regulatorydevelopments

18

2.5Culturalfit

21

2.6FintechandESG

21

3.Jobroles

23

3.1Chieffinancialofficer(CFO)

25

3.2Financialcontroller

27

3.3Assuranceprovider(auditor)

28

3.4Transformationlead

30

3.5Digitalaccountant

32

3.6Regulatoryexpert

33

3.7Taxadviser

35

3.8Fintechstrategist

37

3.9Entrepreneur

39

3.10Seniormanager

41

4.Conclusion

44

Acknowledgements

45

References

46

FINTECH:STATEOFPLAY–OPPORTUNITIESFORFINANCEPROFESSIONALS|EXECUTIVESUMMARY

6

Executivesummary

Fintech,thecomingtogetheroffinancialservicesanddigitaltechnology,hastransformedhowfinancialservicesaredeliveredandconsumed.It’sasectorthat’sthrivingwithdiversecomponents:forexample,onlineor‘neobanks’,paymentsystems,paymentgateways/applicationprogramminginterfaces(APIs),investmentbankingback-endinfrastructure,‘insurtech’,‘wealthtech’and‘regtech’.Andthat’sbeforeconsideringfrontierareassuchascentralbankdigitalcurrencies,cryptocurrencies,andnon-fungibletokens.

Withsuchabewilderingarrayofactivityonoffer,itcanbeeasyforprofessionalaccountantstoassumethatthisisnotsomethingtheycouldcrediblyengagewith.Infact,theexactoppositeistrue.Theyareneededmorethaneverinthisstillrelativelynascentindustry,asitseekstobothdisruptandcollaboratewiththetraditionalfinancialarchitecturethatpowersourworld.

HalfofthosewhorespondedtoaglobalACCA–CAANZsurveyseecareeropportunitiesforthemselvesinfintech.Roughlyafurtherquarterdon’tseecareeropportunities,butdon’tcategoricallydisagreewiththestatementeither,perhapskeepingopenthepossibilityforthefuture.

Thisreporthighlights10differentjobrolesforprofessionalaccountantswithinfintechandillustrateshowtheircontributionsandskillsetsaddvaluetotheorganisationsthattheyrepresent.Thisspansarichseamofexperiencefromchieffinancialofficers(CFOs)andauditorstodigitaltransformationexpertsandentrepreneurs,tonameafew.

Andinsodoing,itrevealsanexciting,wideranging,andhigh-valueportfolioofskillsthatprofessionalaccountantsarealreadybringingintofintech.Theseskillsincludetheirunderstandingofnewbusinessmodels,commerciality,andtheabilitytotellacompellingfinancialstorytoinvestors,drivingtrustthroughassuranceandclarityoffinancialinformationwithemergingnormsincorporatereporting,adigital-firstmindsetthatcanoperatewithoutvoluminouspapertrailsand,perhapscrucially,aflexibleapproachthatcanpivottosatisfychangingneedsinafast-movingindustry.

Whatemergesisatremendousopportunityforprofessionalaccountantstoexplorethisunfoldinglandscape.Toensurethattheyarewellplacedtobenefitasfintechgrowsinscaleandscope,thereportprovidesseveralperspectivesandrecommendsthataccountancyandfinanceprofessionals:

nbuildtheirawarenessoftheproductsandserviceswithinthefintechlandscapegloballyandthecompetitivedynamicsthatwillshapeit,lookingahead;thisisamulti-dimensionalsectorwithboth

business-to-consumer(B2C)andbusiness-to-business(B2B)propositions

nunderstandtheregulatoryconsiderationspertinenttotheareasoffintechthey’reexploring;inmanyinstances(particularlyforemergingareassuchascryptocurrencies)thereisalsoaneedforthosewhocanhelptoshapethestandardsandregulatorytreatment

nreinforceaninnovationandpurpose-drivenmindset.Thefintechenvironmentisextremelyfastpacedanddynamic,andbenefitsfromindividualswhoareexcitedaboutnewideasthatcandrivesustainablevalue;andwhocanpivotfasttosatisfychangingbusinessrequirements.

Toprovideanenablingenvironmentforthis,thereportmakesthefollowingfurtherrecommendationstogovernmentsandregulators.

nCometogethertodevelopcommonprinciplestounderpinamulti-jurisdictionapproachtofintechregulation.Thereareprecedents,suchastheEU’sGeneralDataProtectionRegulation(GDPR),coveringallEUmemberstates.Aninternationalregulatorysandboxshouldbecreatedtoexploreminimumglobalstandardsforfintechregulation;thiswasanapproachsupportedbythree-quartersofthefinanceprofessionalsgloballywhofedintothisresearch.

nPrioritisesecuredatamanagementandcybersecurityattheheartofframeworksforgovernmentandregulatoryapprovalofnewfintechproductsandservices.Giventhedata-drivennatureoffintech,cybersecurityisakeyconcern(expressedby83%ofthosewhorespondedtoanACCA/CAANZsurvey)ofgovernments,businesses,andthepublic.Waysofdrivingpublicconfidenceinthisregardincludegovernment-backedcertificationschemesforfintechservicesandproducts–particularlythosethatarebusiness-to-consumer(B2C)–toprotectendusers.

nGovernmentsshouldincentivisefintechinnovationandgrowth.Fintechisanindustrywhichattractstalentedpeopleandhelpstodevelophigh-skilljobs.

Italignswithgovernmentandprivatelyfundedresearchprogrammes,suchasthoseledbymajoruniversities.Andtechnologydevelopedforfintechcancatalyseothersectors,suchashealth.Wethereforecallongovernmentstoconsideranapproachwhichprioritisesareasidentifiedbyfinanceprofessionalsglobally,suchasbuildinglinksinternationallytolearnbestpractices,workingwitheducationpartnerstoimproveskills/training,developinglabs/sandboxestosupportinnovation,andsupportingfintechasatoolforthedevelopmentagendatotacklechallengessuchasfinancialinclusion.

FINTECH:STATEOFPLAY–OPPORTUNITIESFORFINANCEPROFESSIONALS|EXECUTIVESUMMARY

Approach

Inadditiontoliteraturereview,thisreportisinformedby:

ninterviewswithACCAandCAANZmemberswhoareconnectedtofintech

naglobalsurveyof5,723respondentscomprisingmembersandstudentsacrossACCAandCAANZ

nsurveydatasupportfromMeridianWest.

7

8

5%

13%

6%

7%

DoyoutrustFintechproductsmoreorlessthantraditionalfinancialproducts?

Trustinfintechreduceswithage

MoreLessNettrust

41%

33%

23%

18%20%20%

13%

18-35

36-55

56+

Covidacceleratedfintechadoption

nAgree,74%

nDisagree,6%

nNeitheragreenordisagree,13%

nDon'tknow,7%

inyourcountry

74%

IamconcernedaboutcybersecurityriskslinkedtoFintechadoption

25%

29%

22%

Globaldatasummary

Manyaspectsofthedatasethavebeenmadeavailableexternally,

andthelinktoaccessthisisavailableonthereporthomepage.

Ofthe5,723respondents:

SouthAsiaandAsiaPacific

87%resideinAfrica,WesternEurope,

orfinance-relatedrole

72%workfullorpart-timeinanaccounting

70%agedbetween21and45

publicpractice,and14%infinancialservices

31%workinanorganisationwithover1,000

40%workinthecorporatesector,23%in

employees,19%with250-1,000

nPart/full-timeaccountingor?nancerelatedrole,72%

nPart/full-timenon-accountingor?nancerelatedrole,9%

nStudyingfull-time,9%

nNotcurrentlyworking/careerbreak/retired,8%

nOther,2%

nAfrica,20%

nWesternEurope,17%

nAsiaPaci?c(exANZ),17%

nAustralia,11%

nNewZealand,7%

nSouthAsia,16%

nMiddleEast,4%

nCentralandEasternEurope,4%

nCaribbean,3%

nNorthAmerica,1%

2%

8%

9%

9%

72%

4%3%1%

20%

16%

17%

7%

11%

17%

4%

83%

4%

Agree

Disagree

Iseecareeropportunitiesformyselfinfintech

nOther,16

nAddressingregulation,16

nAge,24

nRegion,44

nAgree,50%

nDisagree,14%

nNeitheragreeordisagree,

26%

nDon’tknow,

10%

10%

26%

50%

14%

Relativeinfluenceofdriversforseeingcareeropportunities

16

16

24

44

7driverswereconsidered:the4pillarsofthefintechattitudemodel(seebelow);and3demographicsfactors(region,age,sector)

FINTECHATTITUDEMODELSUMMARISESSURVEYQUESTIONSINTO4PILLARS;

(maximumavailablescoreperpillaris25)

Currentadoption–fintechusagetestedacross14productsforbothprofessional(intheirorg)andpersonaluse.Ascoreof25meanstherespondentusesallfintechproductscitedprofessionallyand/orpersonally;0meanstheyusenone.

Trustperception–[1]trustinfintechcomparedtotraditionalfinancialproducts;[2]comparedwithwell-knownFSbrands;and[3]concernaboutcyberrisk.Ascoreof25meanstherespondenttrustsfintech“muchmore”thantraditionalFSproducts/brandsand‘stronglydisagrees’oncyberriskconcern;0means‘muchless’and‘stronglyagree’.

Addressingregulation–levelofagreementwiththe3propositionstested.Namely,[1]needforregulatoryalignmentbetweenjurisdictions,[2]roleofRegtechtotacklevolumeandcomplexityofregulation,[3]controllingrolloutinsomeareasoffintechuntilregulationismoredeveloped.Ascoreof25meansarespondent“stronglyagrees”withpropositions;0means“stronglydisagrees”.

Governmentsupport–roleofgovernmentinsupportingfintechadoption.Measuredacross8dimensionsnamely:[1]taxincentivesforfintech[2]labs/sandboxestosupportinnovation[3]accesstofundingforentrepreneurs[4]facilitatingcompetition[5]encouragingadoptioninsmallercities[6]buildinglinksinternationally[7]workingwitheducationpartnerstobuildskills[8]supportingfintechfordevelopment,egfinancialinclusion.Ascoreof25meansarespondent“stronglyagrees”withalloptions;0means“stronglydisagrees”withall.

nGovernmentsupport,18

nAddressingregulation,18

nTrustperception,12

nCurrentadoption,8

18

18

12

8

nCurrentadoptionisstillinrelativelyearlystagesataroundathirdofthemaximumpossibleindexedscore

nTrustisamixedpicturewitharoundhalfthemaximumpossibleindexedscore

nTheneedtoaddressregulation,andforgovernmentsupportcamethroughstronglyatalmostthreequartersofthemaximumpossibleindexedscore

Biggestdriversforseeingcareeropportunitiesinfintecharewhereyoulive(thoseinAfrica,Middle-EastandSouthAsiaindescendingorderseegreatestopportunity),howoldyouare(youngerpopulationsseemoreopportunity),andhowstronglyyoufeelregulationneedstobeaddressed(thosewithstrongerviewsseemoreopportunity).

Fintechadoptionbyproduct

75%

73%

70%

46%

44%

Mobilepayments,contactlesspayments

Online/mobileonly(fullydigital)banking

International/domesticmoneytransfering

CloudPoS/EPoS/EFTPoS

Paymentgateways(APIs)

42%

Creditscoring

Trading,settlement,andcustody

Peer-to-peer(P2P)lending

18% 18% 14% 13% 13%

12%

2%

Crowdfunding

Cryptocurrencies,non-fungibletokens(NFTs)

CentralBankDigitalCurrencies(CBDCs)

Wealthtech

Regtech

Insurtech

Other

9

FINTECH:STATEOFPLAY–OPPORTUNITIESFORFINANCEPROFESSIONALS|1.INTRODUCTION

1.Introduction

Fintech,atermderivedfrom‘financial’,and‘technology’,hasseenasignificantincreaseinitsvisibilityinrecentyears.

TheFinancialStabilityBoarddefinesfintechas‘technologicallyenabledinnovationinfinancialservicesthatcouldresultinnewbusinessmodels,applications,processesorproductswithanassociatedmaterialeffectonfinancialmarketsandinstitutionsandtheprovisionoffinancialservices’(FSB2021).Atanoperationallevel,thetermeffectivelyreferstocomputerprogramsandothertechnologiesusedbybusinessestoprovideautomatedandimprovedfinancialservices(Deloitte2020).

Thefinancialservicessectorisestimatedtocomprisebetweenone-fifthandone-quarteroftheglobaleconomy(Ross2021).Whentakentogetherwiththeeverydayrealityofmakingpaymentsoraccessingotherfinancialproducts,itisclearhowfundamentalthissectoristoourlives.

Thoughthetermismorerecent,theideaisnot.FromtheearliestcreditcardsandATMsmorethan50yearsago,toelectronicfundstransfersystems,digitisedfinancehaslongbeenthere.Butthe2008globalfinancialcrisisbroughtrenewedfocusonthesectoranditsfrailties.

Andinsodoing,itexposedtheneedforimprovements,whichcameintheformoffintechstart-upsspringingup

totacklevariouspain-pointsinthetraditionalfinancialsystem.TheserangedfromB2Cproductstoimproveuserexperiencewhendealingwithbanks,toproductstacklingaccess-to-financeissuesforsmallandmedium-sizedentities(SME),toimprovementstoback-endcomplicatedlegacysystemswithininstitutionalandinvestmentbanking.

Thisistheresultofseveralfactorstakingshapeinparallel.TheseincludeCloudcomputing,thedataexplosion,theriseofartificialintelligence(AI),anincreasingfamiliaritywithdecentralisedtechnologies;aswellasregulatorydevelopmentstoenabledataprivacyandsharing.

Professionalaccountantsarewellplacedtoparticipateinthismaturingsector.Togrowandattractinvestment,fintechoperatorsvaluethosewhocanhelpthemprofessionalisewhilemaintainingtheirinnovation‘DNA’.

Whetherinfosteringtrustinthenumbersthroughauditandassurance,drivingdigitaltransformationorensuringregulatorycompliance,professionalaccountantscanplayavitalroleand,indoingso,carveoutnewandexcitingopportunitiesforthemselves.

THEFINANCIALSERVICESSECTORISESTIMATEDTOCOMPRISEBETWEENONE-FIFTHAND

ONE-QUARTEROFTHEGLOBALECONOMY(ROSS2021).WHENTAKENTOGETHERWITHTHEEVERYDAYREALITYOFMAKINGPAYMENTSOR

ACCESSINGOTHERFINANCIALPRODUCTS,ITISCLEARHOWFUNDAMENTALTHISSECTORISTOOURLIVES.

FINTECH:STATEOFPLAY–OPPORTUNITIESFORFINANCEPROFESSIONALS|1.INTRODUCTION

10

PROFESSIONALACCOUNTANTSARE

WELLPLACEDTOPARTICIPATEINTHISMATURINGSECTOR.TOGROWANDATTRACTINVESTMENT,FINTECHOPERATORSVALUETHOSEWHOCANHELPTHEMPROFESSIONALISEWHILEMAINTAININGTHEIRINNOVATION‘DNA’.

FINTECH:STATEOFPLAY–OPPORTUNITIESFORFINANCEPROFESSIONALS|2.SETTINGTHESCENE

11

Mobilepayments,contactlesspaymentsOnline/mobileonly(fullydigital)bankingInternational/domesticmoneytransferingCloudPoS/EPoS/EFTPoS

Paymentgateways(APIs)

Creditscoring

Trading,settlement,andcustody

Peer-to-peer(P2P)lending

CrowdfundingCryptocurrencies,non-fungibletokens(NFTs) CentralBankDigitalCurrencies(CBDCs)Wealthtech

Regtech

Insurtech

75%

73%

70%

46%

44%

42%

29%

22%18%

18%

14%13%

13%

12%

Other2%

0%

2.Settingthescene

nFintechisdisruptingallaspectsoffinancialservicesandcomprisesadiverserangeofsegments.

nIt’saglobalstoryspanningbothdevelopedandemergingmarkets.

nFintechstart-upsbothcompeteandcooperatewithlargeincumbentbanks;‘bigtech’companies,ieAmazon,Google,etc.areemergingaskeycompetitors.

nRegulationisplayingcatch-upwiththefastpaceofinnovation.

nFintechculturetendstobelesshierarchicalandmoreflexible,enablingfirmstoadaptfasttochanges.

nFintechhasthepotentialtosupportenvironmental,socialandgovernance(ESG)objectives,egfinancialinclusionthroughcheaperaccesstofinance.

2.1Diverseandgrowing

Ifonebelievesintheadagethatoneshould‘followthemoney’,thenthisshowsthatfintechisfirmlyestablished.Globalventurecapitalinvestmentinfintechstart-upsreachedUSD125bnin2021(Dealroom.co2022),itshighestever,and2.8timesthelevelsseenin2020.Fintechisamulti-facetedsectorcomprisingarangeofproductsandservices(Figure2.1).

Paymentsandlendingarecitedassignificantareasoffintechadoption.Onpayments,70%ofoursurveyrespondentsareusingfintechformoneytransfer.Therehavebeenarangeofinnovationsinthisspace,suchaspeer-to-peersystemswheretwoindividualswithmatchingcurrencyrequirementscantransactviaaplatform(say,onesellingeurosandbuyingpoundssterling,theotherdoingthereverse).

Fintechisusedby75%ofthemforphonebasedandcontactlesspayments:oftenaveryrecognisableformoffintechfortheendconsumer,while44%citemoreback-endusecasesinvolvingAPIstoconnectpaymentsanddataacrossdifferentsystems.Almosthalfofrespondentsreportusingonline/mobileonlybanking.42%reportusingcreditscoringapplications.Asregardsothersourcesofloansorfunding,P2Plendingwasmentionedby22%ofrespondentsandcrowdfundingby18%ofthem.About30%reporteduselinkedtowholesaleorinvestmentbankingintheirorganisationsviaareassuchastrading,settlement,andcustody.Useof‘frontier’areassuchascentralbankdigitalcurrencies,cryptocurrenciesandnon-fungibletokenswasreportedbyapproximately15%ofrespondents.

FIGURE2.1:Fintechadoptionbyproduct(eitherintheirorganisationsprofessionally,orintheirpersonallives)

%40%50

%

70%

20%

60%

30

10%

80%

12

FINTECH:STATEOFPLAY–OPPORTUNITIESFORFINANCEPROFESSIONALS|2.SETTINGTHESCENE

1.Online/mobileonly(fullydigital)banking:Bankswithnophysicalbranches

2.Peer-to-peer(P2P)lending:borrowerconnectsdirectlywithlenderthroughonlineplatform,removingbank’sroleasintermediary

3.Crowdfunding:fundingaproject/venturebyraisingmoneyfrommanypeoplewhoeachcontributearelativelysmallamount,typicallyviatheinternet

4.Creditscoring:statisticalanalysisperformedbylendersandfinancialinstitutionstodeterminecreditworthiness(abilitytopaybacktheloan)

5.International/domesticmoneytransfer:electronicfundstransfer

6.CloudPoS/EPoS/EFTPoS:point-of-saletechnologiestoprocessandstoresalesdataonlineasopposedtolocallyoncomputeroron-premisesserver

7.Mobilepayments,contactlesspayments:paymentusingcreditcarddetailsstoredinmobile,orwherethereisnocontactneededtophysically‘swipe’thecreditcard

8.Paymentgateways(APIs):applicationprogramminginterface,whichisasoftwareintermediarythatallowstwoapplicationstotalktoeachother

9.Regtech:usestechnologytoimproveregulatorycontrols/process,egrisk/fraudprofiling,regulatoryreporting,marketmonitoring,digitalidentity,knowyourcustomer(KYC)

10.Insurtech:usestechnologytoimproveinsuranceofferings/process,egappstoextendcoverageorreducepremium(eguse-based),claimsandriskmanagementapplications,IoT(includingtelematics)

11.Wealthtech:usestechnologytoimprovewealthmanagement,egrobo-advisers,personalfinancialmanagement(budgetingapps,financialcomparisonsites)

12.Trading,settlement,andcustody:Trading(buying/sellingsharesandotherfinancialassets,eghigh-frequency/algorithmictrading,copyandmirrortrading),settlement(ensuringtransferofassetandexchangeofassociatedfundsamongthecorrectparties,egbrokingandclearingservices);custody