As a whole, the sector remains strong. The number of paying customers continued to increase year-on-year among post-revenue fintechs, with 45% reporting more than 500 customers, up from 41% in 2021.

However, talent remains scarce, with two-thirds of fintechs indicating rising employee salaries were a challenge. Meanwhile, almost one-third of firms say they failed to meet their capital raising expectations in 2022.

ESG considerations are areas that can be improved, says EY, with only 30% of fintechs currently measure their business sustainability or carbon footprint, just 19% having a sustainability goal and 27% implementing some sustainable business practices.

Separately, the percentage of respondents who believe Australian fintechs are internationally competitive fell to 69% from 80%, putting the sector’s confidence almost back to 2019 levels. For those planning overseas expansion in the next three years, the US, UK and New Zealand remain the top three most attractive markets.

May Lam, EY Oceania fintech leader, says: "To weather the market challenges ahead, fintechs can further improve the sector’s resilience by focusing on greater collaboration and partnerships both within and beyond the sector, investing back into the ecosystem, strengthening their ESG capabilities, and opening up the talent pool by considering diverse and alternative hiring strategies."