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Developing economies are adopting fintech faster

Russia, China, and India have the highest market penetration for fintech companies in the world. In China and India 87% of residents currently use fintech services. This is in stark contrast to the United States, where just 46% of the population use financial technology services. The rise of fintech has been largely driven by consumer demand for 24 hour banking and international payment services.



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Russia retained the third place in terms of penetration of financial technologies this year, with 82% of the citizens using various services. China and India topped the rating, with 87% of residents using fintech services. South Africa (82%) and Colombia (76%) also made it to the top five.

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Developed countries are slow adopters

It is worth noting that the USA and Japan, where the world’s largest technology companies are based, are placed at the end of the list – on the 24th place US (46% of the country’s population uses financial services) and on the 27th place Japan (34%).

The top three countries have not changed in two years, since the last study was conducted by EY, but the penetration of fintech services increased by 18% in China, by 35% in India, and by 39% in Russia.

Russia’s most popular fintech service

Transfers and payments have become the most popular fintech service among Russians – 100% of the country’s citizens know about this service (96% in the world). The proportion of Russians who have ever used these services has reached 90%. In other categories, the awareness of Russians ranges from 81% to 86%, but the actual use of some citizens is close to zero.

On average, 29% of the respondents were unfamiliar with budgeting and financial planning, 22% did not know about savings and investments, 24% – about loans, and 14% – about insurance.

Fears for personal data security do not prevent consumers from using fintech services through online services and mobile applications: 71% of users are concerned about personal data when communicating online with companies in the financial sector, but 60% would prefer to view all their financial products in one place through an application or online. At the same time, only 27% of users would prefer to communicate with their bank through social networks rather than through their own bank application or traditional channels.

Growth potential of fintech services

Significant growth potential is visible in areas such as budgeting and financial planning, as well as savings and investment services. The determining factor in the choice of financial services for 27% of Russian users is the rates and tariffs offered by the service provider. Another 26% pointed to the ease of account creation and registration, 24% – to access to various innovative products and services. For the rest of the users, the key criteria were the convenience of use, improvement of product characteristics and quality of service.

Two years ago, the main reason for the use of fintech services was the simplicity of opening an account and 24-hour access to services. According to the authors of the study, such a change of priorities indicates the growth of the industry both in Russia and in the whole world.

Who do Russians trust?

Russians are wary of services offered by non-financial organizations, preferring similar services from banks or insurance companies. If a non-financial organization cooperates with a traditional financial institution, 45% of Russians are ready to trust it, and only 13% will choose a company that operates independently.

The fintech market may be affected by the Law on “attracting investment through Investment Platforms,” which will come into force in January 2020. The law will stimulate the emergence of new services from non-financial companies, in particular with the use of crowdfunding platforms. So far, raising funds through crowdfunding has been in the grey zone in Russia, while the law introduces the concept of an investment platform and prescribes that only companies created under Russian law and included by the Bank of Russia in a special register will be able to attract investments with its help.


(Featured image by StartupStockPhotos  via Pixabay)

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First published in DailyComm, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Anne Kings is a reporter for the financial sector, often tackling Wall Street and shareholders' interests. She also covers the intersection of media and technology, and delves into interesting topics on entertainment. Sometimes she also writes about the cannabis industry, in particular CBD and hemp. She is currently based in New York.