EY FinTech Adoption Index: FinTech services poised for mainstream adoption in the US with 1 in 3 digitally active consumers using FinTech

New York, 28 June 2017

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  • US adoption has doubled since 2015 and is in line with global 33% respondents
  • Payment services and insurance are driving US adoption rates, at 52% and 20% respectively
  • Millennial adoption at 59% in US tops global millennial average of 48%

Financial technology (FinTech) adoption among consumers has surged globally over the past 18 months and is poised to be embraced by the mainstream, according to the latest EY FinTech Adoption Index. An average of 33% of digitally active consumers across the 20 markets in our study now use FinTech.

Adoption in the US has doubled since the 2015 FinTech Adoption Index report, and now stands at 33%. US consumers have recognized the benefits that FinTech innovation brings: convenience, simplicity, transparency and personalization. The US has the highest adoption rates regarding three of the top five FinTech categories: financial planning tools, savings and investments and borrowing.

“The FinTech industry continues to thrive and we see adoption increasing, as innovative offerings draw US consumers with their simplicity, convenience and novel uses of technology,” said Matt Hatch, Partner, Ernst & Young LLP and the EY Americas FinTech Leader. “This adoption will likely increase with the next evolution of FinTechs, focused on data sharing, open APIs (application programming interfaces), biometrics, and application of artificial intelligence and robotics.”

The study, based on more than 22,000 online interviews of digitally active consumers across 20 markets, shows that emerging markets are driving much of the adoption with China, India, South Africa, Brazil and Mexico averaging 46%.

Payment services and insurance driving adoption

The EY FinTech Adoption Index evaluates services offered by FinTech organizations under five broad categories – money transfers and payment services, financial planning tools, savings and investments, borrowing and insurance. It reveals that money transfers and payment services are continuing to lead the FinTech charge, with adoption standing at 50% in 2017 and 88% of consumers anticipating doing so in the future. The current adoption rate among US consumers is slightly higher at 52%. The new services that have contributed to this upsurge include online digital-only banks and mobile phone payments at checkout.

Insurance has also made huge gains, moving from one of the least commonly used FinTech services in 2015 to the second most popular in 2017, rising to 24% globally. This has largely been because of the expansion into technologies such as telematics and wearables (helping companies to better predict claim probability) and in particular the inclusion and growth of premium comparison sites in the study. The US insurance FinTech adoption rate is 20%.

FinTech users are also actively using sharing economy and on-demand services

Forty percent of FinTech users regularly use on-demand services (e.g. food delivery), while 44% of FinTech users regularly participate in the sharing economy (e.g. car sharing). By contrast, only 11% of non-FinTech users use either of these services on a regular basis.

Along the gender lines in the US, the adoption rate for men is 35%, compared with 28% for women. As expected, the demographic most likely to use FinTech is millennials – 25 to 34-year olds, followed by 35 to 44year olds. People in this age ranges are not only comfortable with technology, but they also require a wide range of financial services as they achieve life milestones such as completing their education, obtaining full-time employment, becoming homeowners and having children. The adoption rate for millennials in the US is 59% compared with the global average of 48%. The two rates for the 35--44 age group are 50% and 41%, respectively. There is, however, also growing adoption among the older generations: 40% of digitally active 45-64 year olds and 17% of those 65 and older regularly use FinTech services in the US. Money transfer and payments are the most adopted services across all age groups in the country.

Future predictions

The EY FinTech Adoption Index finds that FinTech adoption is set to increase in all 20 markets. Based on consumers’ intention of future use, FinTech adoption could increase to an average of 52% globally. It’s estimated that the US adoption will hit 46% in the near future.

Hatch concluded: “In the US, FinTechs continue to gain traction and appeal to consumers. Incumbents or traditional banking institutions are also seizing the opportunity of this innovation and are looking towards greater collaboration with FinTechs in order to create greater customer experiences, and maintain and grow adoption.”

Notes to editors:

The study is based on  more than 22,000 online interviews with digitally active consumers (i.e. those who use the internet) across 20 markets – Australia, Canada, Hong Kong, Singapore, the UK, the US, China, India, South Africa, Brazil, Mexico, France, Spain, Switzerland, Germany, Ireland, Japan, Netherlands, South Korea and Belgium / Luxemburg (considered as one market for this analysis).

A regular FinTech user is defined as an individual who has used two or more FinTech services in the last six months.

Following the widespread interest in the first study (2015), the scope and scale of the research has expanded significantly. The 2015 study was based on 10,131 interviews with digitally active consumers across six markets: Australia, Canada, Hong Kong, Singapore, the UK and the US.

Also reflecting the rapid growth and maturation of the FinTech industry, EY’s Adoption Index has grown from the original 10 FinTech services included in the 2015 survey to 17 types of service this year. Respondents were asked only about services from nontraditional providers, and brand names of established FinTechs in each market were used to aid with comprehension. EY has also broken out one of the categories from the 2015 study, so there are now 5 categories. To stay consistent in the report, we then recalculated the 2015 results across those five categories.

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This news release has been issued by Ernst & Young LLP, a member of the global EY organization that provides services to clients in the US.