International students: a gateway to Asia

Media article posted by Fintech Business on 19 February 2018.

Cards are overtaking cash as the preferred payment method, and tap-and-go ‘contactless’ payments are soaring.

Purchases are increasingly being made by mobile phones, rising from 6 per cent in 2013 to around 20 per cent in 2016.

Australian banks are trialing wearable payment technologies, and a growing number of people are getting microchip implants that let them ditch wallets, cash and travel cards entirely.

Australian Millennials are keenly embracing digital and online banking and calling for more choice and convenience.

There are numerous surveys showing how they want invisible payments, smartphone wallets, cashless money.

As a result, younger people have become a prime target for innovative products. From savings (FirstStep, Sixpark) to financial management (FinchApp) to Super (Grow Super, Spaceship), there are a host of fintechs disrupting incumbents to bring new offerings to the market.

Australia has a relatively financially aware Millennial generation, for example over 80 per cent of Australian students have their own bank account.

This is considerably higher than the OECD average of just under 60 per cent. In China it’s around 55 per cent, and in Poland it’s less than 20 per cent.

This is where Australia’s 620,000 international student population offers a massive opportunity for forward-thinking fintechs.

When international students arrive in Australia, many don’t have bank accounts in their home country, let alone Australian bank accounts.

Yet they are generally digitally savvy and tend to hail from relatively wealthy, middle-class backgrounds, in order to be able to afford the costs of international study.

Despite this massive market of potential customers, few fintechs, like incumbent players, are targeting international students in Australia.

And beyond being a significant customer base, there are major learnings to be made about how to engage with these customers, who come from some of the world’s fastest growing economies.

So, what do fintechs need to do? It comes down to understanding the needs of the international student market and simplifying processes.

English isn’t necessarily their first language, which makes it even harder for them to understand certain concepts, or decode a range of acronyms such as BPAY( which is unique to Australia), EFTPOS and BSB.

They also require varied marketing approaches. For example, Facebook ads won’t work on a mainland Chinese audience, who have grown up using WeChat and Weibo.

Fintechs, with their commitment to improving the customer process and ability to rapidly trial new marketing approaches, are well placed to develop products and processes to appeal to international students.

And perhaps most importantly, fintechs who understand, engage with and win the international student market in Australia can develop a massive advantage when it comes to expanding into, and winning, international markets.

Author: Mark Fletcher

Mark is a qualified Lawyer, with over 15 years of banking and finance experience. He has worked for international investment and Australian regional banks, managing foreign exchange trading activities and financial risks. CEO of Cohort since 2011, Mark is responsible for global partnerships and driving the strategic direction of the company.