China and India, two of the most populated countries in the world, are quickly switching over to commercial financial technologies amid “dramatically’ increased adoption rates globally.
Combining research from 20 markets and over 22,000 online interviews for a wide-ranging perspective on Fintech, this year’s ‘EY FinTech Adoption Index’ [PDF] report begins with the significant suggestion that “FinTech has reached early mass adoption.” Compared to one in seven digital active consumers adopting financial technologies in 2015, the adoption has since risen “dramatically” to one in three digitally active consumers who are now using two or more FinTech services.
Fintech adoption rates are particularly notable in emerging economies including the likes of Brazil, Mexico, South Africa, China and India, with an average adoption rate of 46%, against the global average of 33%.
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Pertinently, China and India have the highest adoption rates in the world, at 69% and 52% respectively.
The report underlined the reason toward these high numbers, stating:
This is because FinTech firms excel at tapping into tech-literate, but financially underserved population, of which there are particularly high ratios in emerging countries.
The United Kingdom, Brazil and Australia follow China and India, with adoption rates above 35%. With a relatively low adoption rate of 14%, Japan is already making moves toward catching up to its Asian counterparts, particularly in digital payments. Japanese financial authorities have mandated a FinTech growth strategy that expects to double its rate of cashless digital payments over the next decade.
The likes of the United States, Hong Kong, South Korea, Switzerland, France, Netherlands, among others, fall below the global average.
Money transfers and payments remain the single biggest use-case of financial technologies. Further, insurance services using financial technologies have grown remarkably in two years to become the second most-used FinTech service, after payments, this year.
At this rate, research predicts India to take the global lead in adopting commercial FinTech solutions.
The report added:
Borrowing and financial planning services represent the largest proportional difference between current and anticipated usage. Money transfer and payments services are likely to remain the most commonly used FinTech segment.
Charts from EY. Image from Shutterstock.