Financial services and fintech foreign direct investment (FDI) into Australia fell in 2020 and has remained subdued this year, as the country enforced some of the world’s strictest Covid-19 lockdown measures and travel restrictions.
Investment in the sector surged in 2019, led by a glut of projects from the US and Europe focused around fintech and insurance in particular. In 2019, 2232 financial services and fintech jobs were created in Australia from 42 projects with a total capital expenditure of $1.1bn, according to FT-owned greenfield data monitor fDi Markets.
Notable FDI projects in 2019 included: German insurance group Arag opening a subsidiary in Sydney to offer underwriting services; Berkshire Hathaway Specialty Insurance, a subsidiary of US group Berkshire Hathaway, opening an office in Adelaide; and UK challenger bank Revolut opening a subsidiary office in Melbourne.
The onset of the Covid-19 pandemic, however, led to a drop-off in investment last year. In 2020, 1559 financial services and fintech jobs were created from 31 projects with a total capital expenditure of $782m.
Notable projects in 2020 included: US group Trintech, which provides software for financial processes, expanding its data centre operations in Australia; UK small and medium-sized enterprise finance aggregator Swoop opening an office in Sydney; and German fintech Naga, which develops products and tools for trading and cryptocurrencies, establishing an office in Sydney.
To the end of September this year, financial services and fintech FDI has created 908 jobs from 22 projects with a total capital expenditure of $522m.
Notable projects in 2021 include: US group Duck Creek Technologies, which develops insurance software, establishing a regional product development team in Australia; US insurance broker Lockton opening an office in Hobart; and US bank Citigroup opening a ‘wealth hub’ in Sydney.
Trends identified using fDi Markets, a comprehensive online database of cross-border greenfield investments, covering all countries and sectors worldwide. Contact us.
