Chinese consumers’ propensity toward digital adoption boosts China’s leadership in FinTech as the country is already the world’s largest and most developed retail e-commerce market, accounting for 47% of global digital retail sales.
So, while London, New York and Silicon Valley, compete to position themselves as the world’s ‘FinTech hub’, China has leapfrogged ahead to become the undoubted centre of global FinTech innovation and adoption, a brand new study reveals.
In fact, according to the report by DBS and Ernst & Young, 40% percent of consumers in China are using new payment methods compared to 4% in Singapore and 35% are using FinTech to access insurance products compared to 1-2% in many Southeast Asian markets. There are also significantly higher rates of FinTech participation in wealth management and lending.
The rationale behind this, James Lloyd, EY Asia-Pacific fintech Leader argues, is related to
China’s unique mix of rapid urbanisation, massive and underserved market, e-commerce growth, explosion in online and mobile phone penetration, and customer adoption willingness have created a fertile ground for innovation in commerce, banking and financial services more broadly.
Trust seems to play a pivotal role in such a dynamic as Chinese consumers are open to sharing personal information online, store payment information in their smart devices and experiment with other forms of non-cash payments. Experts claim:
This has been the social foundation for e-commerce and digital banking success – commencing with retail spending and third-party payments, and quickly expanding to include financial services such as P2P lending, WM, and mutual fund purchases.
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