The UK is driving the adoption of fintech in the developed market as the technology continues to gain traction around the world, according to a new report.
Mainstream adoption is now reality as one in three digitally active consumers across 20 markets use fintech, according to EY's fintech adoption index, which will be published today.
Emerging markets like China, India, South Africa, Brazil and Mexico are driving usage rates.
The study, based on findings from 22,000 interviews, found China and India have the highest adoption rates at 69 per cent and 52 per cent, respectively. Fintech firms in these countries were particularly successful at tapping into the key tech-literate but financially underserved segments.
The UK showed significant growth too, with 42 per cent of consumers now using fintech services.
"It really is now a critical time for traditional financial services companies. If they haven’t already, they need to urgently reassess their business models to ensure they are able to meet their customers’ rapidly changing needs. Disruption is no longer just a risk – it is an undisputable reality," said Imran Gulamhuseinwala, EY global fintech leader.
According to the study, the proportion of fintech users is set to rise to a global average of 52 per cent compared with today's 33 per cent.
Payments and insurance firms push ahead
Money transfers and payments services companies continued to lead the fintech charge with half of consumers using this technology in 2017.
Meanwhile, insurance fintech firms pulled off an impressive turnaround. The segment is now the second most popular fintech service in 2017 after being one of the least commonly used in 2015. Adoption of insurance fintech is now at 24 per cent.
"Fintechs, particularly in the payments and insurance space, 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," said Gulamhuseinwala.