Australian fintechs are struggling to establish distribution channels and acquire customers. A new survey reveals that only 14 per cent of them are trading profitably.Sixty-three per cent have been in operation for two years or less and they employ an average of five full-time and two part-time staff.Despite the obvious challenges, industry players are optimistic and are expecting strong revenue growth in the near term.EY conducted the survey for the industry body FinTech Australia, fielding responses from 163 of an estimated 250 fintech companies in Australia.According to the EY FinTech Australian Census 2016, 54 per cent of fintechs are based in New South Wales and 28 per cent in Victoria. A quarter of them are involved in lending, 21 per cent in personal finance or asset management, and seven per cent in payments and billing. Forty per cent have a financial licence.Forty-eight per cent are entirely privately funded, 20 per cent are commercially funded and 28 per cent rely on a mix. The average size of their last capital raising was just over A$3 million.Eight per cent said their last fund raising had not met expectations.Half said their biggest "external impediment" was customer acquisition, 42 per cent said finding distribution channels and 41 per cent said "building partnerships with banks and other financial institutions" was a key challenge.Thirty-three per cent said regulatory issues were a challenge and 20 per cent said a lack of funding."Internal impediments" included product development, creating suitable systems and processes, and attracting the right talent. Skills in demand include software engineering, design, sales and marketing and product management.When they were asked what their key selling points were, 79 per cent said "more effective solutions", 60 per cent said convenience, 52 per cent said "seamless intuitive user experience", 48 per cent said speed of transactions and 42 per cent said cheaper process.What fintechs would most like from government is capital gains tax relief for start-ups incorporated in Australia and increased tax incentives for angel investors. They also want to see open data protocols mandated.There is strong support for accelerators and incubators, with 69 per cent saying they are an important contributor to the success of the industry. However, 49 per cent said they never used co-work spaces, which suggests a need for more incubators and accelerators.