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Life Health > Life Insurance

Men, Millennials Driving Rise of Fintech

By Marlene Y. Satter

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Financial technology is about to go mainstream.

That’s according to the EYFinTech Adoption Index, which finds that fintech adoption among consumers has surged globally over the past 18 months — in the U.S. it’s doubled since 2015 — and an average of 33% of digitally active consumers across the 20 markets in the study now use fintech.

The U.S. has the highest adoption rates within three of the top five fintech categories: financial planning tools, savings and investments, and borrowing.

(Related: What Financial Firms Can Learn From the Geek Squad)

The index evaluates services offered by fintech organizations under five broad categories: money transfers and payment services, financial planning tools, savings and investments, borrowing and insurance.

According to respondents, money transfers and payment services are at the top of the heap, with adoption standing globally at 50% in 2017; in fact, 88% of consumers anticipate using the technology in the future.

Among U.S. consumers, the current adoption rate is even a tad higher, at 52%. Some of the surge is due to new services, including online digital-only banks and mobile phone payments at checkout.

Insurance is on the rise, too, from being one of the least commonly used fintech services in 2015 to the second most popular in 2017 and rising to 24% globally — although it trails a bit in the U.S., at 20%.

Technologies such as telematics and wearables (helping companies to better predict claim probability), along with premium comparison sites, have helped fuel the rise.

(Related: Cetera Rolls Out Insurtech Solution: Tech Roundup)

The study anticipates that, based on consumers’ intention of future use, fintech adoption could increase to an average of 52% globally, with U.S. adoption hitting 46% in the near future.

In the U.S., the adoption rate for fintech among men is 35%, compared with 28% for women — and, as might be expected, it’s also higher among millennials.

Those aged 25–34 top the user list, followed by those aged 35–44. They’re more comfortable with technology and rely on it for a wide range of financial services as they hit major milestones: finishing their education, finding a full-time job, buying a home and having children.

Among millennials in the U.S., the adoption rate is 59%, compared with the global average of 48%. For those 35–44, it’s 50% and 41%, respectively.

But even older generations are beginning to resort to fintech; 40% of digitally active 45- to 64-year-olds and 17% of those 65 and older regularly use fintech services in the U.S. Money transfer and payments are the most adopted services across all age groups in the country.

— Read Cash Hangs On in Evolving Payments Landscape on ThinkAdvisor. 

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