Financial Services
Financial Technology (FinTech) portrays the emerging financial services sector from the adapting era of Industrialization 3.0 to 4.0. Originally, the term applied only to technology used in the back-end system of established financial institutions. Today, the term has expanded to include all innovative products and services in the financial sectors, including personal financial management, retail banking, investments, payment systems and even crypto-currencies (Sanicola 2017).
Consumers are drawn to FinTech services because propositions are simpler, more convenient, more transparent and more readily personalized. These elements creates a ripple effect across industries as consumers are expecting these aspects in all financial products, regardless of who is providing the service (EY 2017).
By referring to EY FinTech Adoption Index 2017, the average percentage of digitally active FinTech services users have reached 33% across 20 markets. This amazing milestone has been achieved due to vast adoption rate in China (69%); India (52%); U.K. (42%); Brazil (40%); Australia (37%). Sector drivers is caused by FinTech firms that excel in tapping into the tech-literate, but financially underserved population, of which there are particularly high ratios in emerging countries. Other supportive factor would be the political and regulatory influence that actively supports FinTech (e.g. cashless payments in China).

According to the figure above, FinTech adoption rate is forecasted to rise to an average of 52% across all 20 markets. The highest intended use among consumers would be from South Africa, Mexico and Singapore. Nonetheless, borrowing and financial planning are expected to increase more than 100% in usage. Money transfer and payments and services remain the most widely used at 50%, with expected future usage by 65% from consumers. Studies has also shown that super-users who regularly use five or more FinTech services has been increasing in the market.

Bolstered in large part by an uptick in late-stage financing volume, total VC capital invested in Q1 2017 stayed on the historically higher end, reaching just shy of US$2.3 billion. As shown in the graph above, transaction volume was considerably healthy, even if persisting at a subdued rate relative to the exuberance observed in 2015 and Q1 2016.
Sourced from a FinTech analysis report of KPMG 2017, “More established FinTech companies will likely continue to pursue expansion opportunities, either by bringing niche solutions to new markets or by expanding the products and services they provide to their existing markets. On a technology level, artificial intelligence (AI) is anticipated to be a focusable key area for many investors, in addition to smart data and predictive analytics.