Indians are the globe's top adopters of FinTech products and services

14 August 2019 4 min. read
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India has emerged atop a global list of financial technology (FinTech) adoption rates, compiled by professional services firm EY. With 87% FinTech adoption, India shares the top spot with China, while also boasting nearly 100% awareness of FinTech uses for transactions amongst consumers.

The rapid spread of internet access has led many in India to engage with the digital sphere in a more comprehensive manner. Where some have reported that users in India are far from digitally mature when it comes to making the most of digital access, most appear to have understood the value of digitalisation in the financial sphere.

Banks and smaller FinTech companies appear to have succeeded in spreading the value of FinTech, not only in India but across the globe. EY’s latest Global FinTech Adoption Index reveals that the average adoption rate across the globe is at 64% for this year, which is nearly double the adoption rate in 2017 (33%), and four times the rate (16%) when the index was first compiled in 2015.

Consumer FinTech adoption across 27 markets

In order to get a nuanced perspective on FinTech adoption practices, the Big Four accounting advisory firm identifies 19 distinct FinTech services, and places then into ‘buckets’ based on their similarities or differences. Only consumers that delve in at least two buckets classify as FinTech adopters.

Overall, EY has identified five buckets, namely money transfers & payments, budgeting & financial planning, savings & investment, and borrowing & insurance. Those developing FinTech services in these buckets hail from varying backgrounds such as banking, insurance and financial services.

In India, awareness and adoption has skyrocketed across all buckets. Overall, FinTech adoption in the country stands at 87% – level with China – placing it at the top of the global FinTech adoption list. Russia and South Africa also emerged with the same adoption rate of 82%, jointly occupying second place and rounding off the 80%+ countries.

Consumer awareness of FinTech services in each category

The report indicates that while awareness and adoption around most buckets is high, the transfer & payments bucket appears to have made the most significant inroads. In India, 99.5% of the consumers surveyed were aware of the existence of FinTech applications for this breed of transactions. 

According to EY, the high rate in India is a result of the government’s decision to cut down on cash circulation, prompting many financial institutions to develop and market their FinTech services. One example of this is a partnership between Infosys Finacle and Tonetag, which is currently working on a payments system based on sound waves.

Sound wave technology will enable consumers to pay by hovering their mobile phones near payment terminals. The service, which falls in the transfers & payments bracket, is being marketed to as many as 800 million consumers. A number of other firms of various size and scale are working on similar solutions.

Select reasons for using FinTech challengers, from 2017 to 2019

The size and scale in this case is significant because the rise of FinTech appears to have leveled the playing field in the financial services sector. Smaller firms with technical knowhow can now develop advanced FinTech applications and challenge the transaction services of larges banks and financial institutions. 

According to EY, the services from these smaller ‘challengers’ are gaining rapid popularity as well for a number of reasons. These include more attractive rates, ease of engagement, greater diversity and innovation of services and solutions, as well as more personalised experience.