Consumer uptake of FinTech services surges - EY
Consumer uptake of innovative FinTech products is set to be embraced by the mainstream as adoption levels surge among digitally-savvy consumers, according to a study by EY. The research, based on 22 000 online interviews with digitally active consumers across 20 markets, shows that the emerging markets are driving much of this adoption with China, India, South Africa, Brazil and Mexico averaging a 46% participation rate.
The UK has also shown significant growth, as the arrival of a new generation of challenger banks rise up to take on the incumbents, with adoption rates now standing at 42%.
Across all markets, cheaper money transfers and more streamlined mobile payments services are leading the FinTech charge with adoption standing at 50% in 2017.
Imran Gulamhuseinwala, EY global FinTech leader, says: "FinTechs are clearly gaining widespread traction across global markets and have achieved the early stages of mass adoption in most countries. On average, one in three consumers already consume fintech services on a regular basis."
The demographic most likely to use fintech services are millennials - 25-34-year olds, followed by 35- 44-year olds. The study finds that people in this age range are comfortable with the technology and that they also require a wide range of financial services as they achieve milestones such as completing their education, gaining full-time employment, becoming homeowners and having children.
The study has also identified a new segment of users, the "super-user". These individuals use five or more FinTech services and account for 13% of all consumers.
Super-users generally consider fintech firms to be their primary providers of financial services, says Gulamhuseinwala. "FinTechs are not only becoming significant players in the financial services industry, but are also shaping its future," he says. "Their new propositions are increasingly attractive to consumers and this trend is only set to continue as awareness grows, concerns are allayed and new advancements are made. Traditional firms, who sometimes struggle to deliver the same seamless and personalised user experiences, will undoubtedly need to step up their efforts to remain competitive."
Based on consumers' intention of future use, FinTech adoption could increase to an average of 52% globally, says Gulamhuseinwala. The highest proportional increases of intended use among consumers is expected in South Africa, Mexico and Singapore.