Financial technology (fintech) firms in the United Kingdom (UK) want to spread their wings to other parts of the world, and New Zealand is among the countries worth exploring.
With a tech-savvy populace and a sophisticated financial services sector, New Zealand is a fertile ground for UK fintech firm to innovate.
The recently established UK-New Zealand Free Trade Agreement (FTA) gives UK firms seamless entry into the market as they look to make their mark in a new territory.
With the government working to establish a legal framework for online casinos, there are exciting opportunities for UK firms to enter the fray to grow and innovate.
The UK Fintech Advantage
The UK is an established fintech giant with over 75,000 employees. It contributes around 10 percent of the global market and is projected to reach £380 billion by 2030.
Their expansive ecosystem has made British fintech firms a global leader in innovation. They provide cutting-edge solutions in payments, wealth management and consumer banking.
The UK-New Zealand FTA allows the free flow of financial data, recognition of electronic contracts, and smoother business travel for companies eager to broaden their horizons.
Financial services have traditionally been one of the UK’s major exports to New Zealand, meaning a solid trade relationship already exists.
Fintech companies will be licking their lips at the potential for bilateral trade and investment, especially considering New Zealand is a quick adopter of digital banking and payments.
New Zealand’s Growing Digital Economy
New Zealand has a relatively small financial services sector compared to other global giants, but it still produces sizeable profits.
The small country has a tech-savvy population north of 5.2 million and a non-stop demand for digital solutions, creating a ripe environment for UK fintech firms.
The financial services industry is growing rapidly. According to the 2022 FinTech NZ Report, the sector has experienced a compound annual growth rate (CAGR) of 32%.
The fact that there are only a few large banks and insurers on the NZ scene allows fintech firms to disrupt the traditional models.
Companies such as Revolut, GoCardless and Wise have already entered the NZ market and are thriving. New Zealand has opportunities for B2C and B2B solutions in payments, compliance and data analytics.
The Online Casino Opportunity
New Zealand is creating a legal framework that guides the operation of online casinos, a move that presents several opportunities for fintech payment providers.
The regulations will require operators to develop secure, efficient and compliant systems. UK tech firms already have vast experience curating payment solutions that fall in line with stringent regulations and are well-positioned to meet New Zealand’s demands.
UK tech firms are already critical in securing NZ transactions. The advent of the Confirmation of Payee (CoP) services in New Zealand, powered by UK-based Obconnect, shows the growing role of fintech in protecting customer data.
The top online casinos will need payment verification and fraud prevention technologies. UK fintech firms capitalise on this by offering solutions that tighten security while improving user experiences and ensuring compliance with preset guidelines.
Harnessing the UK-New Zealand FTA
The UK-New Zealand FTA makes provisions for the free flow of trusted data, legal recognition of electronic contracts and signatures.
It also allows for the mobility of professionals, creating an encouraging environment for trade and investment. Barriers such as nationality and residency requirements for senior managers are removed, allowing UK firms to operate without worries.
The recognition of professional qualifications (RPQs) will help ease the process for financial services providers to settle and operate in New Zealand.
Strategic Areas for UK Fintech Firms
The online casino sector and general banking industry need innovative payment solutions. UK firms can help address issues such as instant settlements, fraud and cross-border transactions, building trust with New Zealand businesses and consumers.
People are reliant on financial tech firms to manage their funds and portfolios. UK fintech firms can create tools to help New Zealanders better manage their savings and investment effectively.
The establishment of a legal gambling scene will trigger the need for flexible compliance tools. UK firms with expertise in anti-money laundering (AML) and know-your-customer (KYC) can help with this transition.
The emphasis on digital cooperation gives UK firms a platform to bring their advanced identity verification systems that ensure secure access to online financial services and gambling platforms.
Collaboration and Support
UK fintech firms looking to collaborate and scale their businesses in New Zealand can take advantage of the FinTech Accelerator Programme, led by KiwiBank in partnership with Xero.
Xero also runs a similar Rewired programme, which supports start-ups in their journey, offering mentorship and resources for any market requirements.
By engaging in local initiatives, UK companies can understand how New Zealand works and initiate partnerships that ease market entry.