FinTechs have already built a strong beachhead in developed markets and by the end of the year Ernst and Young (EY) expects those rates of adoption to double.
The figure is revealed in the company’s new FinTech Adoption index. To compile the index EY surveyed more than 10,000 digitally active people in Australia, Canada, Hong Kong, Singapore, the United Kingdom and the United States. The goal was to better understand the overall rate of adoption.
The study notes, “FinTech is revolutionizing the way we pay for goods and services, transfer money between accounts and send it overseas. “
In fact these are the three most-used services according to the survey., “… followed closely by savings and investment products such as online stock broking/spread betting, online budgeting/planning, online investments, equity and rewards crowd funding and peer-to-peer or marketplace lending.”
According to the authors, “Our survey shows that 15.5 per cent of digitally active consumers have used at least two FinTech products within the last six months. As awareness of the available products and services increases, adoption rates could double within the year.”
Hong Kong has the highest rate of FinTech use of all markets surveyed at almost 30 per cent. But even the much larger and tougher US market already has an adoption rate of 16.5 per cent, putting it in second place followed then by Singapore (14.7 per cent), the United Kingdom (14.3 per cent), Australia (13 per cent) and Canada (8.2 per cent).
China unfortunately is missing from the index which is a shame as in many ways it arguably leads the US in FinTech innovation according to some observers.
The index also delves into their attraction of FinTech, revealing the seven top reasons for its use.
- Easy to set up an account
- More attractive rates/fees
- Access to different products and services
better online experience and functionality
Better Quality of Service
- More innovative products than available from a traditional bank
- Greater level of trust than the traditional institutions
And for incumbents, resting on the lazy certain that brand and historical legacy will create a firewall of trust around their core business, think again. The major impediment to adoption is awareness, not concerns over privacy or security.
“Trust has not been a major obstacle to FinTech use, with only 11.2% of respondents saying they don’t trust FinTech products,” say the authors