Financial technology (FinTech) adoption among consumers is set to grow rapidly in the coming year, a change that would force traditional financial services companies to overhaul strategies to compete with new market entrants, global auditing firm Ernst & Young (EY) said in a report.
About 15.5 percent of consumers have used at least two FinTech services, or financial services and products developed by online companies, instead of traditional banks or insurance companies in the past six months, according to the report based on a survey of 10,131 digitally active consumers in Australia, Canada, Hong Kong, Singapore, the UK and the US.
“The adoption of FinTech products is relatively high for such a new industry that the risk of disruption is real,” Ernst and Young advisory leader Jon Huang (黃昶勳) said in the report.
Adoption rates could double in the next 12 months if the respondents proceed with their consumption behavior, the report said.
Traditional financial services providers would have to assess which customers are most at risk from the new competition and step up efforts to meet their demand, as FinTech catches on with consumers, Huang said.
The Ernst & Young survey examines the use of FinTech services in savings and investments, money transfer and payments, borrowing and insurance. The services include peer-to-peer platforms for investments, equity or rewards crowdfunding, financial planning, stock brokerage, foreign exchange and overseas remittances among other FinTech propositions.
Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) recently called on local financial institutions to set up funds for employment replacements, saying that physical banks, insurers and other financial firms might increasingly lose importance as Fintech evolves and causes massive job losses.
Tseng, who headed the Financial Supervisory Commission (FSC) before becoming a legislator-at-large on Feb. 1, urged authorities to take action and help the sector through the transition.
Under his chairmanship, the FSC last year formed a new office to oversee the integration of resources for boosting FinTech, an economic industry composed of companies that use technology to make financial services more efficient.
Payment services have the highest adoption rate of 17.6 percent among FinTech products in the markets surveyed, the Ernst & Young report showed.
Services in this category include the use of non-bank providers to make payments, foreign exchanges and overseas remittances via the Internet.
Savings and investments rank second with a 16.7 percent adoption rate as consumers are comfortable with online stock brokerage and spread betting, the report said.
Meanwhile, consumers are increasingly receptive with the use of online budgeting and planning, investments, equity and rewards crowdfunding and peer-to-peer lending, the report found.
The adoption rate of online health premium aggregates and car insurance using telematics stand at 7.7 percent, while online borrowing through peer-to-peer Web sites reached 5.6 percent, the report said.
Local financial firms should join forces with cloud computing, big data analysis and information security providers in tapping the FinTech market, Ernst & Young said, as Taiwan enjoys an internationally competitive edge in information and communication technology.
FinTech adopters tend to be young, high-income earners and financial firms must heed the trend to avoid losing customers, Huang said.
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
RSS