Fintech adoption rate has risen to an average of 64% this year, with emerging markets like China and India leading the way, according to a report by Ernst & Young (EY).
EY asked more than 27,000 professionals from 27 countries on their use of five fintech categories: money transfer and payments, budgeting and financial planning, savings and investments, borrowing, and insurance.
In China and India - where the likes of Ant, Tencent and Paytm dominate - 87% of those surveyed said they used fintech services. South Africa (82%), Russia (82%), Colombia (76%) and the UK (71%) also have high usage numbers. In contrast, usage is at just 46% in the US, 35% in France and 34% in bottom-of-the-table Japan.
"The fintech industry in India is rapidly expanding, and the adoption rate is growing faster than anticipated. One of the reasons for strong growth is that traditional financial-service companies have entered the fray in a big way," Mahesh Makhija, partner and leader, Digital and Emerging Tech, EY, said.
The fintech industry in India is rapidly expanding, and the adoption rate is growing faster than anticipated"
He added that money transfers and payment services are driving awareness in India.
In India and Russia, 99.5% of consumers are aware of fintech services available to transfer money and make payments. The high rate of awareness in India stems in part from the government's plan, announced in 2017, to decrease the amount of paper currency in circulation.
Money transfers and payments services are continuing to lead the charge with use of one or more services standing at 75% in 2019, while an average of 96% of respondents are aware of such services.
Insurtech services have also expanded rapidly, with an average of nearly half of global consumers using a premium comparison site, feeding information into an insurance-linked smart device or buying products such as peer-to-peer insurance.
Meanwhile, people around the world are increasingly willing to use fintech services from retailers (45%) and telecoms (44%).
Globally, small and midsize enterprise (SME) adoption of fintech stood at 25%, while 56% use a banking and payments fintech service. EY interviewed senior decision makers at 1,000 SMEs in five countries— two developed countries (the U.K. and the U.S.) and three emerging countries (China, Mexico and South Africa).
"No longer just disrupters, fintech challengers have grown into sophisticated competitors, with an increasingly global reach. The interactions between challengers, incumbents and players from outside the financial services industry are forming fintech ecosystems that are replacing traditional bilateral partnerships," Makhija said.