Low fintech usage in Singapore spells potential for firms

EY report shows 23% are active users, but attitudes are changing with consumers more willing to try out services

Consumers here may be a bit reluctant to use financial technology but they say they are willing to try more such services in future, according to a new report.

This shift in attitude will provide more opportunities for local financial firms and start-ups, said Mr Liew Nam Soon, EY's managing partner for financial services in Asean.

The EY report found that only 23 per cent of those it termed "digitally active" here use fintech regularly, compared with 15 per cent in 2015, but well under the global average of 33 per cent.

China was the leader in using fintech at 69 per cent, with India next at 52 per cent.

South Korea and Hong Kong had an adoption rate of 32 per cent, while Japan was one of the lowest, at 14 per cent.

EY conducted 22,000 online interviews across 20 markets from March to April. They asked about several services, such as those from digital-only banks to online stockbroking and borrowing using peer-to-peer platforms, among others.

Mr Liew told a briefing yesterday: "The increase in emerging markets is that a lot of traditional and fintech players are using fintech to reach out to the unbanked.

"To some extent, Singapore scores low because it's a small country, and it's quite easy to walk to a branch to get something done.

"We do see branch and traditional channels usage going down, but not as quickly as some of the other markets, because they are tapping new customers in new segments."

However, he noted there is hope for use to rise here.

The report found fintech usage is expected to reach 56 per cent in the near future, compared with an expected global rise to 52 per cent.

Mr Liew added that greater awareness will improve Singapore consumers' understanding fintech products better and help them overcome trust issues.

With much potential ahead, Mr Liew said firms have to think of ways to reach out to customers. EY is helping firms team up on Nov 17 as part of the Singapore FinTech Festival.

"Having great technology but no access to customers is often the issue. So is partnering the way to go? It doesn't necessarily mean working with traditional banks," he added.

"It could be teaming up with a supermarket, telco or utility provider, which we are seeing."

A version of this article appeared in the print edition of The Straits Times on July 19, 2017, with the headline 'Low fintech usage in S'pore spells potential for firms'. Print Edition | Subscribe