China has the greatest rate of fintech adoption in the world, according to a new study from
EY.
The research found that 69% of digitally-savvy consumers have adopted an element of fintech, more than double the global average.
India had the second highest rate of adoption at 52% while Australia rounded out the top five on 37% alongside the UK (42%) and Brazil (40%).
In insurance specifically, 24% of global respondents have adopted insurtech with India leading the charge on 47% adoption followed by the UK (43%) and China (38%).
Imran Ahmed, insurance partner and Oceania financial services performance improvement leader at EY, said that while the rise of tech could be seen as threatening to the broker market, it presents opportunities.
“For brokers, this offers an opportunity to say how they use this technology to even better understand what their customers do today and do it in a more cost efficient and analytical way than they have done previously,” Ahmed told
Insurance Business.
“I think it offers up a different way to work. Yes, I think if organisations are complacent and ignore it then, yes, it could be a threat but I would argue it could complement very much what brokers do today.”
The rise of fintech in China is having a knock-on effect on other parts of Asia Pacific as fintech firms branch out internationally or look to partner with international firms.
James Lloyd, EY Asia Pacific fintech leader, said that Chinese firms are also having an indirect impact on the growth of fintech and insurtech as other countries try to reproduce the Chinese success.
“As a result, we can expect to see adoption levels continue to increase rapidly right across the region,” Lloyd said. “The factors driving this increase in anticipated future use across Asia Pacific are mixed. In some instances, it’s a case of ‘technology leapfrog’, with new market entrants tapping into tech-savvy, financially under-served populations.”
Lloyd noted that this leap-frogging is evident in China, Indonesia and India whereas more traditional financial services firms are investing in fintech in other markets such as Australia.
While the growth of fintech has mainly been focused on the banking and payment sector, insurance is now an area of growth that shows potential, Ahmed noted.
Investment in technology may sound like a concern for the bigger end of town, but Ahmed noted that barriers to entry on technology have rapidly dropped.
“One of the good things about fintech and insurtech is that some of this isn’t about huge upfront investments and actually, much of it is accessible on an on-demand or pay as you go basis,” Ahmed continued.
“Actually, for smaller companies in many ways, the barriers to accessing this technology are nowhere near as high as they would have been 10 or 15 years ago.”
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