EY releases first ever global SME Fintech Adoption Index

The EY FinTech Index, which has been going since 2015, is back for its 2019 edition.

The publication interviews more than 27,000 consumers in 27 markets to take the pulse on where fintech is at.

Unsurprisingly, the sector is thriving, or in EY’s words, innovation has now ‘become the new normal.’

2019 marks the first year the index has taken a deep dive into SME fintech, building out the first ever SME FinTech Adoption Index. It’s a survey of 1000 organisations across 5 markets – no mean feat indeed.

The SME index interviewed decision makers in the UK, US, South Africa, China and Mexico, via a digital survey. An important disclaimer, as digital enablement isn’t always a feature of SMEs everywhere, developed and non-developed nations included.

Here is a snapshot of the results that caught our eye.

China leads the way in SME Fintech adoption, with 61% of SMEs interviewed having used a banking and payments, financial management and financing and insurance service from fintechs in the past 6 months. The UK (18%) is not far in front of South Africa (16%), with Mexico at 11% and the US at 23%.

Global averages for fintech adoption sit at 25%, however China skews the data significantly, given the highly digitized and platform centric nature of the financial services economy. Skewed or not, it represents the future that the western world is lagging behind on.

SMEs that were considered adopters tended to be VC backed, global in outlook and with an online/mobile sales model.

In developed markets, like the UK and the US, the most widely used services are online bookkeeping, payroll management, online billing and online payment processors. In emerging markets SMEs are also frequent users of payments and billing services, but mobile point-of-sale devices and readers also feature.

Fintech isn’t always a panacea, however.

More than half (57%) of those surveyed who were classified as adopters said the services available from fintechs didn’t meet the needs of their company. It presents a distinct opportunity for a unifying force in SME fintech that can connect the dots in a fragmented system for time-poor business owners.

The gap in attitudes between the adopters and non-adopters when it comes to data sharing with fintechs is also interesting. 89% of adopters indicated they were willing to share banking data with a fintech, compared to only 50% of non-adopters. 69% of adopters were willing to share that data with a non-financial services company, which should present some interesting opportunities to those in tangential markets to fintech, where access to banking data could provide additional context and experience enhancement.

You can access the full report here.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

I have no commercial relationship with the companies or people mentioned. I am not receiving compensation for this post.

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