FinTech adoption rates rose to an average of 64 percent this year, according to EY’s Global FinTech Adoption Index 2019, based on an online survey of more than 27,000 digitally active consumers in 27 markets, and including a survey of 1,000 small and medium enterprises (SMEs) using FinTech services in China, the US, the UK, South Africa and Mexico.
Emerging markets are leading the way with both China and India at 87 percent. Close behind are Russia and South Africa, both with 82 percent adoption. Among developed markets, the Netherlands (73 percent), the UK (71 percent) and Ireland (71 percent) lead in adoption, reflecting in part the development of open banking in Europe.
“The FinTech industry has grown up and grown out. The adoption rate is growing faster than anticipated. One of the reasons for strong growth is that traditional financial services companies have entered the fray in a big way,” said Gary Hwa, EY Global Financial Services Markets Executive Chair and EY Asia-Pacific Financial Services Leader.
Money transfers and payment services driving awareness
Globally, an average of 89 percent of consumers are aware of the existence of in-store mobile phone payment platforms and 82 percent are aware of peer-to-peer payment systems and non-bank money transfers. Availability of these FinTech services is even more accentuated in both India and China with 99.5 percent of consumers aware of money transfer and mobile payment services.
Changing customer priorities
According to the EY Global FinTech Adoption Index 2019, customer expectations have evolved, resulting in disruption and innovation in the financial services industry. Traditional banks, insurers and wealth managers are disrupting their own propositions by offering digitally accessible and technology-forward services.
Findings from the index showed that 27 percent ranked pricing as their top priority while choosing a FinTech service and 20 percent picked the ease of opening an account.
In markets such as Chile, France and Japan, trust is the only factor for not choosing a FinTech challenger over traditional financial institutions.
SMEs — a distinct and fast-growing customer segment
SME adopters have greatly influenced the FinTech evolution and have played a major role in bringing it to the mainstream. Adoption is highest in China at 61 percent, followed by the US at 23 percent.
As the current adopters are expected to continue using FinTech and additional companies are envisioned to be added in the list of adopters, the global adoption rate could surge from an average of 25 percent to 64 percent very soon.
“No longer just disrupters, FinTech challengers have grown into sophisticated competitors, with an increasingly global reach. The interactions between challengers, incumbents and players from outside the financial services industry are forming FinTech ecosystems that are replacing traditional bilateral partnerships,” Hwa added.