Small but buzzing: the Austrian fintech ecosystem

This study aims to enhance transparency on the Austrian fintech industry by collecting firsthand industry data provided by Fintech Austria – the country’s largest fintech interest group – and subjecting the data to statistical analysis conducted by the Oesterreichische Nationalbank (OeNB). The analysis of key features of Austrian fintechs across various dimensions reveals that the domestic fintech industry is a small but rapidly growing industry. While being based on a diverse – and increasingly specialized – range of business models, most fintechs still operate in the payments sector. Typically, fintechs are established in larger cities by men who have already pursued a previous career. As a rule, their ownership structures are divided between a broad domestic shareholder base and a more concentrated investor base abroad. The dynamics in the fintech industry need to be closely monitored. If not identified in a timely manner, strong growth and the tendency of online industries to form oligopolies or monopolies may lead to systemic implications and financial stability risks. Moreover, increasing cooperation between incumbent banks and fintechs as third-party providers may impose outsourcing risks. Should the latter fail, this may have negative spillover effects on the financial sector as a whole. Therefore, it is all the more important that policymakers and market participants alike keep track of the fintech industry’s structure and trends. With this in mind, the analysis presented in this study was largely automated to allow for periodic updates and thus continuous monitoring of the Austrian fintech industry in the future.