FinTech services have become globally mainstream at 64% customer adoption rate, with consumer usage rates doubling across key Asia-Pacific markets.i Transforming the way the financial ecosystem operates, FinTech companies have evolved as an alternative to traditional financial services providers by providing seamless customer-focused solutions, transforming backend business processes and upgrading legacy infrastructure. Globally, the FinTech market is anticipated to grow at a CAGR of 20% during 2020-2025 and reach the market value of $305 billion by 2025.
As the industry continues to innovate and evolve at a rapid pace, FinTech players will continue to broaden their horizons to cater to a diverse range of segments.
Among FinTech services, money transfer and payments enjoy the highest adoption with 75% of consumers or 3 out of 4 global consumers using this type of FinTech service. Peer-to-peer payments, non-bank money transfers, and in-store mobile payments are the most commonly used services in this category, with ease of setting up an account as key driver to their popularity. Clearly, a frictionless experience has become the new banking standard.
The uncertainty levels and severe market turmoil in 2020 have highlighted the importance and value of high-quality human advice in asset and wealth management services. Digital engagement increased 7 to 10 times and customers demand an omnichannel experience for financial advisor (FA)/relationship manager (RM) interaction.ii Online collaboration and digital tools offer an on-demand access to efficient, convenient and transparent financial advisory. To improve effectiveness in the evolving operating environment, relationship managers should remain central to the client relationship to provide expertise and emotional reassurance to maintain customer loyalty across all service touchpoints.
Insurance sector continues to show strong adoption with nearly half the consumers globally using digital insurance services. While demands of digital customers continuously grow, understanding the customer profile and expectations has become critical for insurers. With deep customer insights, firms will be able to develop personalised products and offer better protection plans. Data analytics leveraged within business operations, such as purchasing and claims processing, will also deliver differentiated experiences to clients.
Non-financial companies today such as retailers, technology platforms, and automakers are increasingly developing their own ecosystems to extend technology-enabled financial services. These businesses that provide holistic propositions accompanied by complementary services, including activities such as insurance and lending, are on the rise with 68% of global consumers considering a financial product offered through them. Organisations from outside the financial industry that unlock scalability in their digitisation journey to foster innovation and create new channels of growth will deliver more value to clients, resulting in improved customer experience and loyalty.
Financial technology firms are accelerating the pace for innovative, secure and inclusive digital finance. Transforming into agile and customer-centric organisations and bolstering partnerships with technology solutions providers will be crucial to gain advantage over peers in customer satisfaction.
