The number of consumers that are adopting FinTech services and products has been steadily growing over the past few years, rising from 16 percent in 2015 to 33 percent in 2017, and 64 percent in 2019.
The COVID-19 pandemic has only solidified the need for FinTech apps as people adjust to working and spending more time at home. In fact, there was a 72 percent increase in the use of financial apps in Europe in just one week during the height of the pandemic as consumers adjusted to their “new normal.”
With that in mind, countries are vying for the top spot when it comes to FinTech innovation—with Asian countries currently taking the lead. The latest EY Global FinTech Adoption Index, a survey of 27,000 digitally active consumers in 27 markets, showed that over the past two years, adoption of FinTech tools across the region has surged among consumers and small businesses.
“From fast-growing young economies, such as China and India, to mature markets, such as Australia and Japan, advanced FinTech systems are rapidly becoming part of the fabric of everyday life,” the report noted. “In every market where consumers have smart phones – and, in Asia, the majority do – people are gaining access to a growing range of virtual financial services, and at a faster rate than in most of the world’s other markets.”
In just two years, consumer usage rates of FinTech-powered services have doubled – and in some cases tripled – across key Asia-Pacific markets. Hong Kong, Singapore, and South Korea have 67 percent FinTech adoption, while Australia now stands at 58 percent. China and India lead the way with a whopping 87 percent.
Other countries are also gaining inroads in the FinTech market. In 2019, investments in the sector reached $9.5 billion in the U.S., while the U.K. is currently home for more than 20 FinTech accelerators, including Anthemis Venture Studio, Anthemis & BBVA Bank of England, Barclays Accelerator, and others. Lithuania has 170 FinTechs, with its central bank working to speed up development, and Switzerland has been focused on attracting startups to boost its FinTech profile.
Still, they will have a tough time dethroning Asia. The EY report added that significant trends—including financial regulators taking on a more active role in encouraging innovation, as well as a rise in virtual banking offerings—should keep the region’s FinTech sector thriving into the future.