Insurance has also made huge gains, moving from being one of the least commonly used fintech services globally in 2015 to the second most popular in 2017 - now at 24 per cent.
According to the study, the upswing has largely been due to the expansion of technologies such as telematics and wearables (helping companies to better predict claim probability) and the inclusion and growth of premium comparison sites.
The future of fintech
Fintechs are not only becoming significant players in the financial services industry, they are also shaping its future direction.
Their new propositions are increasingly attractive to consumers who are underserved by existing financial services providers and their use will only rise as fintech awareness grows, consumer concerns fail and technological advancements, such as open APIs, reduce switching costs.
Based on consumers’ stated intention of future use, fintech adoption could increase to an average of 52 per cent globally.
While current levels of adoption vary across the region, future use of fintech is also expected to increase in each of the Asia-Pacific markets surveyed - although the factors driving this increase are mixed.
In some instances, it’s a case of ‘technology leapfrog’, with new market entrants tapping into tech-savvy, financially under-served populations. This is particularly evident in markets like China, Indonesia and India.
In Australia on the other hand we are seeing greater engagement from the larger, traditional financial services players, as they invest in their innovation agendas and partner with fintechs to keep pace with evolving consumer expectations.
Regionally, we are also seeing strong uptake of alternative retail payment services, with many fintechs using payments as their entry point into the market – providing the infrastructure from which they can then build their wider fintech ecosystem to include additional services, such as lending, credit scoring, wealth management and even non-financial, on-demand services.
Fintech start-ups have been very successful in building on what they do best – using technology in novel ways and having a laser-like focus on the customer.
What the EY research clearly shows is fintech is gaining widespread traction, both locally and globally, and has already achieved the early stages of mass adoption in most countries.
Incumbent financial services companies are also recognising fintech adoption is now a reality. In this environment, traditional players will need to continue to reassess their business models and look at ways of integrating fintech developments into their own business models if they want to keep up with the changing needs and expectations of digitally active consumers.
Traditional firms, who sometimes struggle to deliver the same seamless and personalised user experiences will undoubtedly need to step up their efforts to remain competitive against larger technology players who are moving laterally into financial services.
However, this also creates new opportunities and it’s likely we will see greater collaboration between traditional firms and fintechs in the future.
James Lloyd is the EY FinTech Leader for Asia-Pacific
The views expressed in this article are the views of the author, not Ernst & Young. The article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Liability limited by a scheme approved under Professional Standards Legislation.