Emerging markets led the adoption of fintech services

The report found that fintechs are gaining momentum and mindshare amongst younger, tech-savvy, and affluent customers. Moreover, emerging markets led the adoption where over 75 % of customers in China and India report using services provided by fintechs, followed by the UAE and Hong Kong.

While fintech providers continue to have a disruptive market presence, overall customer trust levels in these providers remain low. Only 23.6 % of customers say they trust their Fintech provider compared to 36.6 % 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.

Traditional financial institutions continue to face challenges, with 44.0 % of executives confident in their fintech strategy. This is not surprising given that only 34.7 % affirmed they have a well-structured or proactive innovation strategy in place that is embedded culturally. The risk-averse nature of traditional companies also makes it difficult for them to create cultures that prioritize innovation, and 40.3 % of executives said that theirs is not conducive to innovation.

The report found that traditional companies are increasingly pursuing a wide range of strategies in response to fintechs. 60 % of financial institutions view fintechs as potential partners, but nearly the same percentage (59.2 %) are also actively developing their own in-house capabilities. Beyond in-house development and partnership, executives are exploring other models as well, such as investment in fintech (38 %), partnering with educational institutions (34.3 %) or setting up accelerators (29.6 %), while only 18.6 % are acquiring fintechs.