The third biennial report about global FinTech adoption has been issued by EY recently. Current trends are amazing. The report shows the huge growth in adoption since its first version in 2015.
EY interviewed about 27000 respondents in 27 consumer markets, and more than 1000 SME in 5 markets.
ASD team highlighted top of the most outstanding insights in this post.
Consumer FinTech adoption trends:
1. Global FinTech adoption doubles every 2 years:
Figure 1. Comparison of FinTech adoption in six markets from 2015 to 2019 (source).
2. Global awareness of Fintech services is now very high:
Money transfer and payments – 96%
Budgeting and financial planning – 71%
Savings and investment – 78%
Borrowing – 76%
Insurance – 86%
Figure 2. Consumer awareness of FinTech services in each category (source)
3. Consumers changed their priorities in using FinTech services: more attractive fees or rates are on top.
EY states in its report:
One telling sign of the FinTech industry’s maturation is the evolution in consumer priorities when they look for a provider. In 2017, 30% of adopters ranked the ease of opening an account as their top priority when selecting a FinTech provider, while only 13% said attractive fees or prices were most important. In the 2019 survey, the priorities flipped, with 27% ranking price first and 20% picking ease of opening an account. Chinese consumers ranked ease of onboarding as the least important consideration—a reflection of the widespread adoption in that market of open APIs and platform-based services, which has made opening any kind of financial services account virtually frictionless.
Figure 3. Select reasons for using FinTech challengers, from 2015 to 2019 (source).
4. Non-financial companies are on the rise and their ecosystems are growing rapidly.
68% of consumers are willing to consider a financial services product offered by a non-financial services company.
Figure 4 and 5. Analysis of preferences in using non-financial services company as providers of financial services products (source)
SME FinTech adoption trends:
1. FinTech adopter among SME are pretty alike among surveyed markets:
FinTech adopters share common characteristics across markets. They are likely to be high-growth companies, backed by venture capitalists (VCs): adoption rate among VC-backed SMEs is 38%. Adopters also tend to have a global outlook: the adoption rate among SMEs with an international customer base is 55%.
Figure 6. SME FinTech adoption (source)
2. Banking and payments services are the most utilised in the UK:
Figure 7. Use of each category of FinTech services (source)
3. SME’s ecosystems are actively adopting FinTech challengers:
As observed amongst consumers, SMEs are increasingly joining FinTech ecosystems that integrate different financial services propositions offered by challengers, incumbent financial institutions, and, in some cases, non-financial services companies. Such ecosystems offer SMEs added efficiency and security through their interoperability and ability to connect different business functions.
… When facing new regulations, 93% of adopters favor a technology solution, compared with 70% of non-adopters.
Figure 8. Analysis of views on risk management, financial needs, and use of technology, by FinTech adopters and non-adopters (source)
4. 97% of SMEs are seeking advice from multiple sources when considering new FinTech services:
…FinTech adopters are more likely than non-adopters to seek advice broadly—another sign that adopters are better informed and operate like larger organizations. We asked SMEs how many sources they would consult, from zero to three.
Figure 9. Analysis of sources of advice used, by FinTech adopters and non-adopters (source)
Read the previous Fintech Adoption Index report.