The story of the growth of FinTech services extends beyond the consumer sector. To better understand the business perspective on FinTech adoption, EY teams surveyed key decision-makers at 1,000 SMEs across five countries – China, the US, the UK, South Africa and Mexico.
The survey found that SMEs have become significant users of FinTech globally, with one in four respondents saying they have used services provided by a FinTech in each of these key categories: banking and payments, financial management, financing and insurance(Figure 2).
This indicates that SMEs have been using FinTech products and services as a key part of their financial management. As with the consumer market, this trend was particularly prominent in China, where 61% of those surveyed indicated this was the case.
The top six factors driving FinTech adoption among SMEs were:
1. Range of functionality and features
2. 24/7 availability of services
3. Ease of setup and configuration
4. Rates and fees
5. Compatibility with daily operations and infrastructure
6. Trust in the providers team and their reputation.
The most popular FinTech service to have been used was in the banking and payments category, with 56% of users saying they have done so. Again, China was a notable outlier, with 92% of Chinese SMEs indicating they have used FinTech banking and payments services.
Another major trend was the increasing number of SMEs joining FinTech ecosystems. These ecosystems integrate various products and services offered by challengers, financial incumbents and non-financial institutions. Unsurprisingly, those adopting FinTech ecosystem solutions were those who take a technology-first approach to problems – 93% of adopters prefer to find a tech-first solution where possible, including when facing new regulations.
Those SMEs adopting FinTech were also much more likely to consider new services carefully. For example, 98% of SME adopters said they regularly review their technology to make certain they’re using the most appropriate options. And when changing service providers, they are more likely to seek advice from multiple sources, such as business advisors, government officials, and professional and industry contacts.
Compared with consumers, SMEs were more willing to share their data with FinTech companies, over and above other third-party service providers. As many as 89% of SME adopters said they were willing to share their data with FinTech companies, versus the 70% who would with other financial service companies, and the 63% who would with non-financial services companies.
These findings show that various factors are driving the FinTech space forward – including increasing consumer and SME familiarity with FinTech products and services, attractive rates and increasing ease of portability to a new account.
But with adoption now also increasingly happening in the business market, there is a growing opportunity for FinTech firms, incumbents and non-financial organizations alike to seize the wave of FinTech disruption. With signs of rising trust in the concept of FinTech from consumers and business alike, the growth of the sector shows no sign of letting up.
For further insight into FinTech’s growing adoption and influence, take a full look at the report‘s research and methodology.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
