Globally, an average of 89 per cent of consumers are aware of the existence of in-store mobile phone payment platforms and 82 per cent are aware of peer-to-peer payment systems and non-bank money transfers. Availability of these fintech services is even more accentuated in Mainland China with 99.5 per cent of consumers aware of money transfer and mobile payment services.
Most Asian markets benefit from a powerful “fintech feedback loop”, with the increased adoption driving increased innovation - and vice-versa. As Mainland China continues to lead in financial services innovation, the inspiration from Chinese fintechs is increasingly permeating across the wider region.
This influence can be seen in the response of incumbent financial institutions who are seeking to build out their own fintech-inspired propositions, as well as in the increased regulatory support for non-traditional challenger players across banking, insurance, and wealth management in many markets across the region.
Both locally and globally, customer expectations have evolved, resulting in disruption and innovation in the financial services industry.
Findings from the Index show 27 per cent of consumers globally rank pricing as their top priority while choosing a fintech service and 20 per cent picked the ease of opening an account. In Japan, trust is the only factor for digitally active consumers not choosing a fintech challenger over a traditional financial institution.
In the face of these changing expectations and priorities, traditional banks, insurers and wealth managers are disrupting their own propositions by offering digitally accessible and technology-forward services.
There is also an emerging trend towards greater industry convergence, with sector leaders in adjacent industries such as transport, retail and telecommunications increasingly adding digitally enabled financial services to their range of offerings.
This is yet another area in which parts of Asia are likely to a leading role, as they already have with fintech innovation and adoption.
China on the lead
While consumer adoption of fintech continues to rise, this really only tells part of the story.
Policymakers, incumbent financial institutions and fintech challengers alike are increasingly interested in the small to medium enterprise (SME) market as a source of future growth. So, for the first time this year, the Index also included a survey of 1,000 SMEs using fintech services in five key markets, Mainland China, the US, the UK, South Africa and Mexico.
Globally, one in four digitally active SMEs are fintech users. Again, Mainland China displays the highest adoption rate of all markets surveyed at 61 per cent, putting it well ahead of the second highest market, the US, which came in at 23 per cent SME adoption.
The exceptionally high adoption rate for Mainland China is indicative of the widespread use of financial platforms, open application programming interfaces (APIs) and the well-developed ecosystems in that market.
More than half of SMEs worldwide have used banking and payments services in the past six months, making it the most widely used fintech category; in Mainland China the rate is 92 per cent.