December 1, 2017 by Ron Stokes, FinTech Leader; and Morgan Richardson, Manager, Financial Services Transactions, EY Canada
A common fear in the financial services industry is that new market entrants, also known as fintechs, will do to insurance what ride-sharing apps have done to taxis. Consumer expectations are changing and nearly every financial service institution — no matter its size, structure or particular circumstances — should be well on its way to digital transformation. As fintechs establish themselves in the Canadian market, they are changing more than just the user interface.
The EY FinTech Adoption Index 2017: The rapid emergence of FinTech, released this past July, found that fintech adoption has more than doubled over the last 18 months, and the trend will continue as Canadians become more familiar and comfortable with alternative offerings. And there are plenty of choices — the fintech umbrella includes money transfer and payments, financial planning, savings and investments, borrowing and insurance. What is more, these start-ups are finding ways to build their own customer base with creative offerings for younger generations.
Fintech companies share two core characteristics: a laser-like focus on the customer proposition and a willingness to apply technology in novel ways. These are powerful differentiators in a marketplace where many incumbents are still focused on selling products rather that solving customers’ problems. As a result, they struggle to deliver the seamless and personalized user experiences consumers increasingly expect.
The other fintech driver is favourable demographics, a market ready to embrace the digital offerings. Unsurprisingly, the fintech adoption index revealed the use of fintech products and services is higher among younger consumers. The demographic most likely to use fintech are 25- to 34-year-old consumers, followed by 35- to 44-year-olds.
Read the full article in the Digital Edition of the November 2017 Canadian Underwriter.
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Ron Stokes, FinTech Leader; and Morgan Richardson, Manager, Financial Services Transactions, EY Canada