Insights from the EY FinTech Adoption Index and EY FinTech Australia Census

Transcription

1 Insights from the EY FinTech Adoption Index and EY FinTech Australia Census Erik Heller EY Sweeney May 2018 Page 1

2 FinTech Adoption Index 2017 Page 2

3 EY s Global Fintech Adoption Index Comprehensive research to highlight where FinTech is gaining traction Identifies 17 different types of FinTech services in five broad categories FinTech usage/adoption defined as having used two or more FinTech services in the last six months RESEARCH METHOD 2017 global online survey of over 22,000 consumers 20 markets across Americas, Europe, Africa and APAC 8 markets also covered in 2015 Next edition scheduled for late 2018/early 2019 Money transfer and payments Insurance Savings and investments Financial planning Borrowing Adoption: accepting or starting to use something new. Cambridge, Dictionary Page 3

4 Fintech has achieved initial mass adoption in most markets Progress of FinTech adoption globally and across 20 markets Page 4

5 FinTech adoption more than doubled in key markets Comparison of FinTech adoption in six markets between 2015 and Australia has one of the fastest growing FinTech adoption rates. Australia Canada Hong Kong Singapore UK US 2015 adoption 2017 adoption Page 5

6 New services and new players are driving higher adoption Comparison of FinTech categories ranked by adoption rate in 2015 and Money transfer and payments: 18% 1 Money transfer and payments: 50% 2 Savings and investments: 17% 2 Insurance: 24% 3 Financial planning: 8% 3 Savings and investments: 20% 4 Insurance: 8% 4 Financial planning: 10% 5 Borrowing: 6% 5 Borrowing: 10% Page 6

7 FinTech users prefer digital solutions to manage their lives Views on digital financial services, FinTech users versus non-users (%) FinTech adoption across age brackets FinTech users Non-users % 48% 41% 30% % 15% 9% I prefer to manage as many aspects of my life via digital channels as possible I mainly use my smartphone to access financial services products rather than a desktop computer or laptop I am generally willing to take the most convenient financial services product even when it is not the cheapest and above Age (years) Page 7

8 FinTech adoption will continue to gain momentum Comparison of past, current and anticipated future use of FinTech, by market (%) Average Australia Belgium and Luxembourg Brazil Canada China France Germany Hong Kong India Ireland Japan Mexico Netherlands Singapore South Africa South Korea Spain Switzerland UK US Future Page 8

9 Accelerating adoption in smaller categories will fuel growth Comparison of current and anticipated future use of FinTech, by FinTech category 65% 2017 use Future use 50% 33% 39% 18% 20% 20% 24% 10% 10% Money transfer and payments Financial planning Savings and investments Borrowing Insurance Page 9

10 FinTech adoption is expected to surpass 50% Analysis of current and future use of FinTech 1 33 Current FinTech users -4 Estimated lapsed users 11 Current users of one service Current nonusers Anticipated future users Majority of non-regular FinTech users have begun the journey to FinTech adoption. Analysis on future intended use suggests adoption will increase to 52%. Page 10

11 Barriers to increased adoption are evaporating quickly Comparison of two selected barriers to adoption in six markets between 2015 and Was not aware they existed Prefer to use a traditional financial services provider Was not aware they existed Prefer to use a traditional financial services provider Was not aware they existed Prefer to use a traditional financial services provider Was not aware they existed Prefer to use a traditional financial services provider Was not aware they existed Prefer to use a traditional financial services provider Was not aware they existed Prefer to use a traditional financial services provider Australia Canada Hong Kong Singapore UK US Page 11

12 FinTech Australia Census Page 12

13 FinTech Australia Census Collaboration of FinTech Australia and EY RESEARCH APPROACH FinTech Australia Census: comprehensive and focussed thought leadership research - Help define the industry - Identify the challenges - Cast a light on way forward QUANTITATIVE RESEARCH: 166 ONLINE SURVEYS QUALITATIVE RESEARCH: 10 IN-DEPTH INTERVIEWS VOX-POPS: 16 INTERVIEWS OTHER EY FINTECH REPORTS/ RESOURCES In 2016, FinTech Australia had identified some 250 FinTech companies in Australia. We now estimate there s close to 600. From Hobart to Townsville, Perth to Gold Coast great FinTech companies emerging everywhere. Danielle Szetho, CEO FinTech Australia Page 13

14 Fast facts: Sector profile 2017 Business based Biggest competitors (excl. none) Number of employees (median) Overseas 2% WA 9% NT 0% SA 4% QLD 12% NSW 54% VIC 19% 36% Incumbents 29% Other fintechs in Australia with a similar offering Type of fintech (multiple response) 27% Overseas fintechs with a similar offering 7% Other 5 Full-time 2 Part-time End customers (multiple response excl. don t know) TAS 1% Age of company (excl. didn t answer) year or less 36% 21% 2 to 3 years 44% 48% > 3 years 20% 31% Company stage % 29% Pre-revenue Post-revenue 57% 71% Net 2 yrs or more 79% Wealth and investment Lending Data analytics / Big Data Payments, wallets and supply chain Asset management and trading Regtech Business tools Marketplace-style / peer-to-peer solution Identity, security and privacy Blockchain/distributed ledger solution Insurance/insurtech Accelerator/venture capital Crowdfunding/fractionalised investing Challenger/neo bank Digital/Crypto currencies /exchanges Other 30% 23% 18% 16% 11% 10% 10% 10% 6% 5% 5% 5% 5% 4% 4% 9% Retail consumers Sophisticated investors SME and/or other startups Corporate Banks and other FSIs Government Other 45% 22% 35% 33% 43% 14% 15% Net B2C 55% Net B2B 71%

15 Drivers of FinTech success TALENT ENVIRONMENT Lack of experience/skill in Australia No 48% Yes 52% DEMAND CAPITAL POLICY FinTech adoption continues to grow A more diverse profile Solution-centric Cost of acquisition and retention Tax incentives Open banking New payments platform Licencing Regulatory sand boxes Page 15

16 Outlook and optimism COMPETITION International 63% feel Australian FinTechs are internationally competitive 45% feel they will be able to win against international competitors Local Lack of quality FinTechs in Australia? 34% agree 38% disagree ADVANTAGE AUSTRALIA Regulatory environment Advanced financial services industry Access to Asia Page 16

17 A global market INTERNATIONAL EXPANSION PLANS % % I am delighted to see the increase in Australian fintech firms that are setting global goals for their businesses. More than half are now focused on expanding overseas in the next year. Supporting these creative start-ups is a major focus of Austrade, especially through our Landing Pads program in five global innovation hubs, which is already propelling many clever Australian businesses to new heights. Stephanie Fahey, CEO Austrade The disruption of financial services is most likely to come from digital giants from developing markets such as China? 87% of Asean FinTechs plan to expand beyond home or current markets or even those technology giants from the US who are extending their platform dominance into financial services. In the face of this, many local fintech start-ups are likely to be acquired by either global players or local incumbents and should be preparing for that possibility by keeping in close contact with potential acquirers. Simon Cant, Chair FinTech Australia Page 17

18 MELBOURNE 8 Exhibition St Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 T PERTH 11 Mounts Bay Rd Perth WA 6000 Australia GPO Box M939 Perth WA 6843 T SYDNEY 200 George St Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 T CANBERRA 121 Marcus Clarke St Canberra ACT 2601 Australia GPO Box 281 Canberra ACT 2601 T

19 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organisation, please visit ey.com. This communication provides general information which is current at the time of production. The information contained in this communication does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. EY Sweeney (a trading name of Ernst & Young) disclaim all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted to be done by any party in reliance, whether wholly or partially, on any of the information. Any party that relies on the information does so at its own risk. The views expressed in this article are the views of the author, not Ernst & Young. Liability limited by a scheme approved under Professional Standards Legislation. eysweeney.com.au 2018 Ernst & Young, Australia. All Rights Reserved. ED None. eysweeney.com.au