Fintech is still a buzzword that creates plenty of talking points in local markets.

In the unlisted space, the focus is largely on the influx of neobanks — digital lenders with no legacy of physical branches.

New entrants such as Volt, Tyro and Judo Bank have been snapping up AFS licences and building out their capital base with plans to take market share from the incumbent heavyweights.

And on the ASX, there’s no doubt the action has been focused on the buy now, pay later platforms (BNPL) and whether they can continue their torrid pace of growth.

But along with the BNPLs, the ASX also hosts a number of other fintechs operating across payments, consumer finance and small business lending.

Having just crossed into a new financial year, we figured now was a pretty good time to take a scoreboard check.

And despite the various differences of opinion and uncertainty, it’s been a pretty good year so far.

Code Name Price ($) Market Cap 12m Return 6m Return
WZR WISR LTD 0.14 $110,629,144.00 483.3% 233.3%
FTC FINTECH CHAIN LTD 0.145 $91,107,744.00 12.0% 233.3%
Z1P ZIP CO LTD 3.14 $1,116,277,376.00 254.2% 194.9%
SPT SPLITIT PAYMENTS LTD 0.505 $158,379,584.00 N/A 153.0%
APT AFTERPAY TOUCH GROUP LTD 25.73 $6,821,163,520.00 163.4% 98.5%
EML EML PAYMENTS LTD 2.87 $720,236,864.00 90.1% 96.6%
CWZ CASHWERKZ LTD 0.3 $47,964,516.00 66.7% 76.5%
MNY MONEY3 CORP LTD 2.12 $384,283,360.00 12.0% 30.6%
IP1 INTEGRATED PAYMENT TECHNOLOGIES 0.018 $5,250,285.00 1.9% 18.9%
RZI RAIZ INVEST LTD 0.49 $32,452,694.00 -49.5% 2.1%
CCA CHANGE FINANCIAL LTD 0.051 $5,041,025.00 -91.6% -13.6%
MNW MINT PAYMENTS LTD 0.024 $18,847,282.00 -14.3% -14.3%
PIL PEPPERMINT INNOVATION LTD 0.012 $11,850,990.00 -42.9% -20.0%

Leading the pack, both in 12-month terms and year-to-date, was consumer finance platform Wisr (ASX:WZR).

In a previous iteration, the company was listed as Direct Money, a peer-to-peer (P2P) marketplace matching lenders with borrowers.

Speaking with Stockhead, CEO Anthony Nantes said P2P lenders were part of the “first wave of fintech disruption that scaled up globally”.

But it was proven that the underlying business model wasn’t sustainable. So Nantes, who was previously COO at SME lender Prospa, led a shift away from that platform to a “more sophisticated business model that can be sustainable and profitable”.

Wisr still operates an underlying lending marketplace, but the shift has focused on building out a broader consumer product.

Those include simple credit checks and a debt-reduction app, which rounds up amounts spent on daily purchases and applies the difference to monthly debt repayments.

Along with its recent price momentum, the stock has been the subject of some bullish projections from analysts.

Stuart Turner and Justin Pezzano from Blue Ocean Equities — which helped source buyers for Wisr’s over-subscribed $15m share placement in March — put out a research report on April 30 listing a price target of 85c. A similar report from RaaS Advisory calculated a base-case valuation of 29c per share.

Still early days

So, have Australia’s big banks missed the boat? Does Wisr represent one of the new breed of fintechs that are going to upend the local financial landscape?

Now seems like as good a time as any, with new laws effective from July 1 meaning traditional lenders no longer have proprietary control of customer data for banking and credit.

The big end of town is also still licking its wounds from the Hayne Royal Commission, but don’t hold your breath waiting for a paradigm shift.

“I think it’s hard to argue the banks have missed opportunities, when you look at the size of their combined market capitalisation,” Nantes said.

“They’ve built successful companies in their own right, but I think defending incumbency is very hard.

“What we’re starting to see is a shift among consumers, who are now expecting better products and more choice — whether that’s payments or different lending products.”

Turner took a similar view: “I’m not discounting a competitive response by the banks. But are the board of CBA going to approve extra spending to compete against a Wisr right now? The answer’s no. The reality is at this stage, there’s nothing that constitutes a threat to the big banks.”

Slice of the pie

But the upside of “early days” is that there’s a big slice of market share on offer for fintechs that can execute a viable growth strategy — a point highlighted by Nantes as well as Blue Ocean and RaaS.

And like many aspects of Australia’s tech and startup economy, they pointed to developments in the US and UK — both of which have more mature markets — as a possible blueprint for future growth in Australia.

“What we’ve seen from overseas markets is it takes a long time for that shift to happen, and then once it does happen it’s like a dam being broken and there’s a big move,” Nantes said.

He highlighted the personal loan market in the US, where almost 40 per cent of new loans “are now written by a fintech startup that pretty much didn’t exist 10 years ago”.

In their analysis of the US and UK markets, RaaS Advisory said fintechs reached a scale-up tipping point when their loan-share reached around 1.5 per cent of the total personal lending market.

RaaS said it expects Wisr — along with privately-owned competitors SocietyOne and RateSetter — to reach that point by the end of this year or early next year.

“If you look at the adoption curve in the US and UK — all of these jurisdictions have got their subtle differences, so I’m not saying it’ll be exactly the same, but if it’s close there’s a promising future. That’s our thesis,” Turner told Stockhead.

Ultimately, Nantes said that when assessing the viability of consumer-lending platforms and fintech more broadly, the key aspect for investors to understand is unit economics.

“It’s about understanding the cost of acquistion and the cost of acquiring new customers,” he says.

“Can you demonstrate that this business can scale? I think with the strategy that we’ve put in place, what makes us unique is our ability to generate those market-leading unit economics.”