FinTech is a word of the day but an in-depth analysis of adoption trends show quite unexpected results. This is considered one of the fastest growing industries in the world and a good number of large investors pour money into FinTech. Nonetheless, developed economies are trailing Asian giants like China and India in the use of online and mobile financial solutions.
China Tops the List of FinTech Adoption by Far
China leads the way with 69 percent of Chines using a sort of FinTech service, a report by financial services firm EY says. India occupies the second place with 52 percent. Third-placed UK demonstrates adoption rates of 42 percent while the average percentage of FinTech use stands at just 33 percent globally. Below a third of people in developed countries like France and Netherlands use advanced financial services, both at 27 percent.
Only some national specifics can explain why FinTech adoption stands at mere 14 percent of population in Japan, which is otherwise a digital leader. Only 18 percent of Canadians use FinTech services, while Belgium and Luxembourg complete the list with only 13 percent.
What Drives Mass Adoption of FinTech Services
Cost of service is a major factor for mass adoption of financial technology. Provision of a paid service for free and a markedly cheaper service boost the use of FinTech, especially in markets where access to financial services is hard. New type of services replacing traditional models is also a major factor.
The growing use of FinTech service by other industries also encourages wider adoption. Another factor to consider is increasing collaboration between FinTech firms and other companies that want to take advantage of large segments of currently underserved customers.
Most Popular FinTech Categories
In 2015, the most popular category of FinTech services was money transfer and payments with 18 percent of users adoption such a solution. EY’s report reveals that in 2017 the same category of services is in use by 50 percent of respondents.
The share of used FinTech insurance solutions grows from 8 percent in 2015 to 24 percent in 2017, making it the second most popular category. In 2017, some 20 percent of people use a FinTech service for savings and investment and 10 percent use a financial planning solution.
Obviously, FinTech industry is in quite a dynamic state as a whole. Adoption of services has a long way to go but FinTech is used across a variety of industries and investment in financial technology is increasing. Companies like Stripe successfully went public recently and many more are in line. We’ll witness major market reshuffles in the coming years with one category of services outpacing another and then a third type of FinTech service gaining pace. Overall, use of FinTech services shows acceptable growth levels which is encouraging.