FinTech's adoption rates rose to 64% this year, according to EY Global FinTech Adoption Index 2019. Emerging markets record the highest adoption rates, reaching 87% in China and India. These are followed closely by Russia and South Africa, both with an adoption rate of 82%. Of the developed markets, the Netherlands (73%), the United Kingdom (71%) and Ireland (71%) have the highest adoption rates, partly reflected in the development of open banking platforms in Europe.
The third edition of the report is based on an online study of over 27,000 digital consumers in 27 markets. This year, the study also included 1,000 small and medium-sized enterprises (SMEs) using FinTech services from China, the US, the United Kingdom, South Africa and Mexico.
"FinTech's industry grew and matured. Adoption rate increases faster than anticipated. One of the reasons for strong growth is that traditional financial services firms are engaged in widespread competition, " said Gary Hwa, executive chairman of EY Global Financial Services Markets and EY Asia-Pacific Financial Services coordinator.
Money transfers and payment services enhance the familiarity with FinTech services
Globally, on average, 89% of consumers are aware of the existence of payment platforms for mobile phones, and 82% know about payment systems between users and non-bank money transfers. The availability of these FinTech services is even greater in India and China, where 99.5% of consumers know about the existence of money transfer systems and mobile phone payments.
Customer priorities change
According to the EY Global FinTech Adoption Index 2019, consumer expectations have evolved and led to radical changes and innovations in the financial services industry.
Banks, insurers and traditional wealth management providers bring revolutionary changes to their own offers, offering affordable digital and innovative technology services. According to the report's findings, in selecting a FinTech service, 27% of customers consider the "price" as the most important, while 20% choose "the ease of opening an account."
In markets like Chile, France and Japan, lack of "confidence" is the only factor that causes customers not to choose the services of a FinTech player and to go to traditional financial institutions.
SMEs - a distinct customer segment, fast growing
SMEs that have adopted these services have significantly influenced the evolution of FinTech's market and have played a major role in popularizing it. The highest adoption rate is recorded in China, 61%, followed by the US, 23%.
"Many of Fintech's solutions to SMEs are now operating in a more complex ecosystem than 2-3 years ago, with solutions that mimic the 'open banking' paradigm. Customers expect, for example, not only lending services but also support in day-to-day management of managed services, "said Cristian Carstoiu, Partner, Business Assistance Department, EY Romania.
Given that it is expected that current customers will continue to use FinTech services and that more companies will be added to the list of those using these services, the global adoption rate could grow very fast from an average of 25% to 64%.
"FinTech companies, which are not just innovation promoters, have become sophisticated competitors with a growing global sphere of influence. Interactions between these new players and traditional and non-financial services companies give rise to FinTech ecosystems that replace classical bilateral partnerships, " said Gary Hwa, executive chairman of EY Global Financial Services Markets and EY Asia-Pacific Financial Services coordinator.