Sharon Masige* says a new survey shows that more than half Australia’s consumers are now actively using fintech products.
More than half of digitally active Australians (58 per cent) are now using fintech products and services — a significant rise from 37 per cent in 2017, according to the Global Fintech Adoption Index 2019 released by big four accounting firm EY.
But while fintech use continues to rise in Australia, the pace of local adoption is slower than in emerging markets, according to the Index, which was compiled off the back of an online survey of more than 27,000 digitally active consumers in 27 markets across six continents.
At 58 per cent, Australia lies slightly below the global consumer adoption average of 64 per cent.
“While starting from a higher base than many other Asian markets, Australia has dipped under the global average in this year’s survey,” EY Australia Fintech Advisor Meredith Angwin said.
“Although our incumbent financial institutions have begun embracing fintech, their current offerings in this space lag behind what we are seeing in some other markets and this has likely had an impact on our overall ranking.”
However, Angwin expects this trend to change as more “challenger” fintech companies emerge in Australia and major players ramp up innovation to remain competitive.
Globally, this third iteration of the Index found that adoption is on the rise.
In 2015, the global consumer adoption rate of fintech services was 16 per cent.
In 2017, this grew to 33 per cent and in 2019, 64 per cent.
Adoption rates were found to be especially high in the Asia-Pacific region, having doubled and, in some cases, tripled, across key markets in the past two years, the Index found.
Mainland China and India had the highest consumer fintech adoption rate globally (87 per cent), with Singapore, Hong Kong and South Korea at 67 per cent.
The overall study looked at 19 different specific fintech services across the five broader categories of “money transfer and payments”, “budgeting and financial planning”, “savings and investments”, “borrowing”, and “insurance”, and awareness levels of these services among consumers.
An average of 89 per cent of consumers globally are aware of in-store mobile phone payment platforms, while 82 per cent are aware of non-bank money transfers and peer-to-peer payment systems.
In mainland China, that number is higher, with 99.5 per cent of consumers aware of non-bank money transfers and peer-to-peer payment systems.
EY Asia-Pacific Fintech and Payments Leader, James Lloyd said the rise in fintech adoption in China in particular will have widespread influence.
“As mainland China continues to lead on consumer and SME [small and medium enterprise] focused financial services innovation, the inspiration from Chinese fintechs is increasingly permeating across the region,” Lloyd said.
“This influence can be seen in the response of incumbent institutions seeking to build out their own fintech-inspired propositions, as well as increased regulatory support for non-traditional challenger players across banking, insurance, and wealth management.”
The Index follows EY’s 2018 census of Australian fintech companies, which identified an overall maturing of the country’s fintech sector.
The census found that fintech companies aged three years or older make up 43 per cent of the local industry, an increase from 31 per cent in 2017.
* Sharon Masige writes for Business Insider Australia.
This article first appeared at www.businessinsider.com.au.
