Inter-city rivalry between Melbourne and Sydney is nothing new. The fact that neither city is the national capital only adds to the frisson. The usual debates as to which is the better for sport, culture, beaches, food, weather, property prices, live music, public transport and coffee normally mean Melbourne edges out Sydney in most categories. (But then, I’m probably biased – however, having lived and worked in both, I think I am reasonably objective.)*

When it comes to startups, and FinTech in particular, the debate is beginning to hot up. At a recent FinTech Melbourne Meetup the topic was “is there room for both?”. The speakers, Toby Heap for Sydney, and Stuart Richardson for Melbourne, remained tactful and diplomatic, as it’s not really appropriate to talk about which is better – more a case of choosing “which is the right location for your own particular FinTech”. So, the debate avoided mere point-scoring, and tried to establish some commonalities, as well as provide some considered views on the benefits inherent within the key differences.

Both cities have a growing reputation for startup success, built on some core foundations: groups of angel investors and VC funds with an increasing FinTech focus; several accelerator programs, incubators and co-working spaces; and a community of founders and aspiring tech entrepreneurs.

From an industry perspective, two of the four Pillar Banks are headquartered in Sydney, and two in Melbourne. More insurers have their HQ’s in Sydney compared to Melbourne (apart from health insurance, where Melbourne hosts the largest market providers), while Tier 2 and regional banks (by their very nature) are more likely to be located outside either city (not including wholly owned brands of the Big 4).

As for pension funds and asset management, particularly in relation to Australia’s superannuation sector, Melbourne is clearly the bigger player, particularly for the largest industry funds (based on their historical links to the trade union movement). In addition, Melbourne is home to some substantial family offices, as well as specialist asset managers, including overseas firms. After all, Melbourne’s establishment wealth comes from the nineteenth century gold boom.

When it comes to markets, Sydney wins out by virtue of housing the main equities exchange, as well as being a hub for futures, fixed income and forex. Sydney also hosts more investment banks, including local branches of foreign players.

In some respects, the differences can be likened to the market roles and dynamics of London vs Edinburgh, New York vs Boston, Frankfurt vs Munich, or even Hong Kong vs Singapore, for example.

For me, however, the key distinction between Sydney and Melbourne can be summarised as: “Sydney trades, Melbourne invests”.

* Note: Content in Context is taking a well-deserved break. Starting this week, the next few posts will feature some brief blogs on different aspects of FinTech. Normal service will be resumed in early November

Next week: do we need a #FinTech safe harbour?