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India has surpassed the global fintech adoption rate on the back of various initiatives taken by the government to promote financial transactions with the help of technology, according to the EY Global FinTech Adoption Index 2019.
While the global average has increased to 64 per cent this year, emerging markets — China and India — were way ahead at 87 per cent. Countries such as Russia and South Africa were at 82 per cent while developed markets like the Netherlands at 73 per cent.
The UK at 71 per cent reflected the development of open banking in Europe.
The Index is based on an online survey of over 27,000 digitally active consumers in 27 markets, including India, where about 1,000 small and medium enterprises (SMEs) said that they used fintech services.
Mahesh Makhija, Partner and Leader, Digital and Emerging Tech, EY, said: “The fintech industry in India is rapidly expanding, and the adoption rate is growing faster than anticipated. One of the reasons for strong growth is that traditional financial-service companies have entered the fray in a big way.”
He said that money transfers and payment services are driving awareness in India.
He added that while globally, an average of 89 per cent of consumers are aware of the existence of in-store phone payment platforms and 82 per cent are aware of peer-to-peer payment systems and non-bank money transfers, in India the statistics for the two categories are as high as 99.5 per cent.
“The elevated awareness in India stems in part from the government’s plan, announced in 2017, to decrease the amount of paper currency in circulation,” the survey added.
Demonetisation and implementation of the GST (goods and services tax) has also played a major role in adoption of financial technologies among SMEs.
“No longer just disrupters, fintech challengers have grown into sophisticated competitors, with an increasingly global reach. The interactions between challengers, incumbents and players from outside the financial services industry are forming fintech ecosystems that replace traditional bilateral partnerships,” Makhija added.
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