Half of banking customers across the globe are using the products or services of at least one fintech firm, according to the first World Fintech Report from Capgemini and LinkedIn, in collaboration with Efma.
The inaugural World Fintech Report (WFTR) quantifies and tracks customer response to the rise of fintechs. It includes the views of financial services industry executives at both fintech firms and traditional financial institutions, and summarises how innovation is key in the emerging industry landscape.
Embraced in China and India
In particular, the WFTR found that fintechs are gaining momentum and mindshare amongst younger, tech-savvy, and affluent customers.
Emerging markets led the adoption where over 75 percent of customers in China and India report using services provided by fintech firms, followed by the UAE and Hong Kong.
Trust Issues for Fintechs
Fintechs have made the greatest inroads in investment management, where 17.4 percent of customers rely on them solely and another 27.4 percent use them in addition to their traditional providers.
With so many fintechs specialising in niche services, the WFTR also found that many fintech customers (46.2 percent) are using services from more than three fintech providers.
Fintechs continue to gain momentum, but overall customer experience and trust remain low. While fintech providers continue to have a disruptive market presence, overall customer trust levels in these providers remain low.
Quality of Service Issues
Only 23.6 percent of customers say they trust their fintech provider compared to 36.6 percent for traditional firms.
Customers noted traditional financial institutions still hold some advantage over fintech providers when it comes to fraud protection, quality of service, and transparency.
Collaborating with Fintechs Delivering Innovation
Traditional financial institutions continue to face challenges, with less than half (44.0 percent) of executives confident in their fintech strategy.
This is not surprising given only about one-third (34.7 percent) affirmed they have a well-structured or proactive innovation strategy in place that is embedded culturally. The risk-averse nature of traditional firms also makes it difficult for them to create cultures that prioritize innovation, and 40.3 percent of executives said that theirs is not conducive to innovation.
“Financial services senior executives are seeing Fintechs in a whole new light as they see greater opportunities to collaborate, but are also making significant headways in building more agile, in-house Fintech capabilities.” said Thierry Delaporte, (pictured above)Head of Capgemini’s Global Financial Services Business Unit and Member of the Group Executive Board.
