Four themes driving FinTech adoption by consumers

Our FinTech Adoption survey explores FinTech adoption across the globe, including most active markets and most popular services.

Rapid emergence and evolution. Mass consumer adoption and significant market traction. Strong prospects for future growth. These ideas summarize the bright and brief history of FinTechs, as confirmed by the latest EY FinTech Adoption Index.

Our most recent survey of more than 22,000 digitally active consumers highlights the impressive and rapid growth in adoption and the variations among 20 different mature and developing markets. There is no doubt FinTech has reached a tipping point.

Four key consumer themes

1. FinTech has achieved initial mass adoption in most countries.

FinTech firms have gained significant market traction. In innovation adoption terms, FinTechs have reached the key milestone of "early majority." The FinTech industry's success in emerging markets results from its ability to tap into tech-literate but financially under-served populations. Key findings:

• Consumers using at least two FinTech services: 33% across 20 surveyed markets
• Markets with highest adoption rates: China (69%), India (52%)
• Average adoption across emerging markets: 46%
• Evidence of increasing awareness: 84% of customers are aware of FinTech services compared with 62% in 2015*

*Analysis considers six markets surveyed in 2015 study: Australia, Canada, Hong Kong, Singapore, the US and the UK

2. New services and new players are driving higher adoption.

Building on the strength of their compelling value proposition and novel use of technology, FinTech firms continue to expand their offerings, which in turn attract more users. New players, including established technology firms, are entering the market. Policymakers are clarifying regulatory frameworks in previously undefined areas, paving the way for more services.

• Most popular category: money transfer and payments, used by 50% of consumers in the last six months
• Category experiencing significant growth: insurance services, which have reached 24% adoption across markets

3. FinTech users prefer using digital channels and technologies to manage their lives.

Unsurprisingly, usage of FinTech products and services is higher among younger consumers. Younger "digital natives" are the most common users. They have a growing need for financial services and are more likely to consider non-traditional providers (as they often lack strong relationships with incumbents).

• Age segments with greatest FinTech usage: 25-34 (48%) and 35-44 (41%)
• Difference between FinTech users and non-users in preference for using digital channels to manage their lives: 26%
• FinTech "super-users" (adopting 5+ services): 13% of all consumers

4. FinTech adoption will continue to gain momentum.

FinTech adoption is expected to increase in all markets, with a future adoption rate of 52% globally, as more non-users embrace FinTech.

• Markets with highest usage intent: South Africa, Mexico and Singapore
• Services with highest expected increase in demand: borrowing and financial planning

Most-used FinTech services

The percentage of digitally active customers who have used each product:

Money transfer and payments: 50%

• Online foreign exchange
• Pay via cryptocurrency
• Overseas remittances
• Online digital-only banks without branches
• Non-banks to transfer money
• Mobile phone payment at checkout

Insurance: 24%

• Car insurance using telematics
• Insurance premium comparison sites
• Activity-based health insurance

Savings and investments: 20%

• Peer-to-peer platforms for high-interest investments
• Investments in equity crowdfunding platforms and rewards crowdfunding platforms
• Online investment advice and investment management
• Online stockbroking
• Spreadbetting

Borrowing: 10%

• Borrowing using peer-to-peer platforms
• Borrowing using online short-term loan providers

Financial planning: 10%

• Online budgeting and financial planning tools

FinTech adoption by the numbers

• 33%: Average FinTech adoption globally (compared with 16% in 2015)*
• 46%: Average FinTech adoption across emerging markets (Brazil, China, India, Mexico and South Africa)
• 84%: Consumers aware of FinTech (compared with 62% in 2015)*
• 55%: Anticipated future adoption rate of FinTech money transfers and payments (up from 50% in 2017)
• 64%: FinTech users prefer digital channels to manage all aspects of life, compared with 38% of non-users
• 13%: Consumers are FinTech super-users, regularly using five or more FinTech services

*Analysis considers six markets surveyed in 2015 study: Australia, Canada, Hong Kong, Singapore, the US and the UK. All figures have been rounded to the nearest whole percentage for consistency.

About the FinTech Adoption Index

Launched in 2015, the EY FinTech Adoption Index is designed to look past the hype and determine actual consumer usage of FinTech services over time. The 2017 study is based on more than 22,000 online interviews of digitally active consumers in 20 markets around the world. Our methodology applies an unweighted averaging of results and uses a “one market, one vote” approach to provide a global, cross-market perspective on themes and trends.

FinTech in perspective: more growth to come

FinTech firms are setting the benchmarks for the financial services industry. Their offerings are attractive to under-served consumers, and usage will only rise as FinTech awareness grows, consumer concerns fall and technology advances to reduce switching costs.

Established firms will be required to offer similar propositions to remain competitive — which creates opportunities for collaboration between start-ups and incumbents. Investors and regulators will continue to play a stabilizing role.