The rate of fintech adoption is likely to double by the end of 2016, according to the study developed by Ernst and Young (EY). The consulting company predicts that the fintech usage will show twofold growth next year, given the growing awareness of the existing products.
“FinTech is revolutionizing the way we pay for goods and services, transfer money between accounts and send it overseas,“ the survey notes.
The company surveyed over 10,000 digitally active users in the US, Canada, Australia, Singapore, Hong Kong and the UK.
“Our survey shows that 15.5 per cent of digitally active consumers have used at least two FinTech products within the last six months. As awareness of the available products and services increases, adoption rates could double within the year,” the study reads.
The study uncovered that Hong Kong is leading in terms of fintech adoption. About 29.1% of local consumers have used at least two fintech products within the last month. Hong Kong is followed by the US (16.5%), Singapore (14.7%), the UK (14.3%), Australia (13%) and Canada (8.2%).
Money transfer/payments, including such activities as online foreign exchange and overseas remittances, are now the most widely used services, accounting for 17.6%. Savings/investment, insurance and borrowing are among the other most popular fintech products, accounting for 16.7%, 7.7% and 5.6%, respectively.
The majority of fintech users are young people with higher incomes, living in highly developed cities like London, New York and Hong Kong.
The key factor encouraging the adoption of fintech products, according to the research, include simplicity of creating an account.
“While many traditional providers are grappling with how to replace cumbersome, outdated and time-consuming account establishment forms and processes, FinTechs are enabling customers to set up services with as little as one click,” the research states.
Lower fees, access to various products, high quality of services and better online experience are driving the use of fintech products as well. Higher level of trust and more innovative services, if compared to those provided by traditional banks, are also among the reasons mentioned by the respondents.
Meantime, lack of public awareness is the major barrier to the growth of fintech adoption (53.2%). “While ease of use remains FinTech’s key selling point, it’s a lack of awareness that is the main impediment to its adoption – the majority of non-FinTech users claim they don’t know such products exist,” the survey unveiled.
32.3% of the respondents answered they just don’t need to use fintech, while 27.7% prefer traditional financial services providers. “Interestingly, trust has not been a major obstacle to FinTech use, with only 11.2% of respondents saying they don’t trust FinTech products.”