EY FinTech adoption

index Germany
Key findings

Introduction to EYs FinTech adoption index

Overview

Page 1

Assessment focusing on end consumer

adoption of FinTech services

Survey of over 12,000 online users across

seven markets 2,014 users from Germany

Respondents were asked about their

awareness and usage of a range of online
financial services products

Careful explanation of products (avoiding

jargon, using brand names)

Questions on reasons why/or why not use the

services

Key topics covered in the study:

Who is using FinTech?

What services are being used?

Why are they using it?

EY FinTech adoption index

What is FinTech?

Organisations combining innovative

business models and technology to
enable, enhance and disrupt financial
services

Page 2

EY FinTech adoption index

FinTech demonstrates that the barriers to entry to

financial services have been fundamentally lowered
Digital structural change is made more
possible by increasing penetration,
lower costs and greater technological
connectivity

The digital revolution has reduced

the cost of capital and provided
alternative funding routes such as
venture capital and incubators

Technology enabled
innovation

Innovative businesses helped by

the FCAs Project Innovate3

Supportive
government policy

Disruptive
FinTech

Page 3

3x

Global FinTech investment

tripled between 2013 and 20142

50%

Millennials believe that tech

start-ups will overhaul banks4

Positive customer
sentiment
Millennials (Gen Y) are redefining
public sentiment towards financial
services with decreasing trust and
brand loyalty

Regulators are engaging with start-ups

to establish policies and initiatives
promoting an encouraging, open
environment for innovation
Source:
1 Commuter Club
2 Accenture, Future of FinTech and Banking

Impact

100+

1
Impact

Drop in cost to launch a tech

startup: $5m in 2000, $0.5m today1

Impact

Impact

90%

Access to private
capital

3 FCA Data Bulletin Issue 2

4 Goldman Sachs socialisation of finance

EY FinTech adoption index

Our analysis covered up to 10 products across

the markets surveyed

P2P lending

P2P borrowing

Equity and
rewards
crowdfunding

Online foreign
exchange

Online
investments

Overseas
remittances

Online
budgeting/
planning

Online
stockbroking/
spread betting

Non-banks to
transfer money

Telematics/healt
h insurance
premium
aggregators

FinTech user = 2 or more products

Page 4

EY FinTech adoption index

Who is using FinTech?

Page 5

EY FinTech adoption index

FinTech adoption is highest in Hong Kong

Germany is slightly below the average

Observations

At 12.3%, Germanys adoption index is lower than the average adoption of 15.5% across the 7 markets.

Hong Kong is at the forefront with more than a quarter of participants using FinTech

Page 6

EY FinTech adoption index

FinTech use is much higher in urban areas,

especially in New York and Hong Kong
Observations

Strong correlation with age and income

FinTech firms are engaging with their urban user groups. Physical meetings and events are commonplace

Marketing costs are lower in cities and there are important network effects to be utilised

FinTech adoption in urban areas

Percentage of FinTech users in major urban areas covered by the survey
33,1%
29,1%
25,1%

14,7%

Singapore

Page 7

15,5%

Average Adoption

16,3%

Sydney

London

EY FinTech adoption index

Hong Kong

New York

FinTech adoption is greatest among younger,

high income groups
Who are they?
Breakdown of FinTech users by age and income group, and by current usage and intention to use FinTech in the future.
Income
Less than US $30,000

10.6%

30.6%

5.8%

17.6%

2.6%

9.4%

US $30,001 US $70,000

24.0%

48.8%

14.7%

34.8%

5.5%

15.9%

US $70,001 US $150,000

32.7%

56.7%

25.9%

45.1%

9.7%

23.5%

US $150,000+

52.4%

64.6%

50.7%

65.3%

13.2%

30.2%

18 to 34

35 to 54
Current

55+

Future

Observations

Respondents across all age groups and income levels said they intend to use FinTech in the future

If they behave as they say they intend to, almost 60% of respondents earning US $150,000+ will be FinTech users
within the next 12 months

Page 8

EY FinTech adoption index

FinTech users in Germany are young and earn

US $ 70k or above
Who are they?
Breakdown of FinTech users by age group and income.
Age

Income

18 34 years old

22.5%

18.6%

35 54 years old

16.5%

14.7%

55+ years old

4.9%

5.5%
Global

Less than US $30,000

6.0%

5.7%

US $30,001 US $70,000

14.7%

15.4%

US $70,001 US $150,000

24.0%

27.7%

US $150,000+

44.1%

41.2%

Germany

Observations

Early adopters of FinTech services tend to be young, with the 18-34 age group being the most active group. While
across markets, the group above 55 years is quite inactive, it seems that in Germany, those users are more open
towards innovations in financial services

Consistent with the other markets surveyed, the highest adoption rate is seen among those with a high income

1. All Global data in this analysis excludes Germany

Page 9

EY FinTech adoption index

FinTech adopters are no more likely to use an

internet-only bank
Type of main bank used by respondents
89%
78%

19%
8%
Traditional bank with branches and
internet banking

3%

Traditional bank with branches and

NO internet banking
All Users

3%

Internet-only bank

FinTech Users

Observations

Data indicates that FinTech users are not just pro-internet customers

Nearly 1 in 5 FinTech users currently use a main bank with no internet banking service, compared to less than 1 in 10
of all users

Page 10

EY FinTech adoption index

What FinTech products have the fastest

adoption rate?

Page 11

EY FinTech adoption index

Although average adoption is highest for

payments, in most markets, investment prevails

Observations

Money transfer and payments has the highest average adoption rate across all markets, closely followed by savings
and investment

Germanys adoption rate for savings and investments is the lowest out of the markets surveyed

Page 12

EY FinTech adoption index

InsurTech as well as borrowing are still in its

infancy

Observations

Apart from in Hong Kong and the US, adoption of InsurTech and borrowing services are very low

Germany has a lower than average adoption rate in all areas except in money transfer and payments

Page 13

EY FinTech adoption index

Payments are leading the adoption index,

largely due to integration into e-commerce
What products types are they using?
Percentage of FinTech users who have used each product type

Global
17,6%

23,2%

Germany

16,7%
7,7%

Money transfers/payments

7,7%

Savings/investment

Insurance

Non-banks to transfer
money

Online stockbroking/
spreadbetting

Car insurance using

telematics

Online foreign
exchange

Online
budgeting/planning

Health insurance
premium aggregators

Overseas remittances

Online investments

Equity and rewards

crowdfunding

P2P

1. All Global data in this analysis excludes Germany

Page 14

5,6%

5,0%

EY FinTech adoption index

2,9%

Borowing

Borrowing via P2P

websites

Across all segments, adoption is highest among

high-income users earning US $150k+
Observations

Lower income groups make greater use of money transfer/payments products than higher income groups

Higher income groups make greater use of borrowing through FinTech providers (typically these are prime loan
products)

FinTech product use by income group (average across all markets)

45,5%
40,5%
27,4%

25,2%
17,9%
10,2%

Money transfer/payments
Less than US$30,000

Page 15

24,5%

23,7%

17,0%
6,8%

2,8%

Savings/investment
US$30,001 to US$70,000

7,1%

11,2%
2,5%

Insurance
US$70,001 to US$150,000

EY FinTech adoption index

5,1% 6,7%

Borrowing
US$150,000+

Why is FinTech use growing?

Page 16

EY FinTech adoption index

Why is FinTech gaining traction?

Why use FinTech?
The top reasons FinTech users give.
(Total responses: 623)

Observations
43,4%
32,4%

Easy to set up an account

15,4%
13,5%

More attractive rates/fees

Access to different products and
services
Better online experience and
functionality
Better quality of service
More innovative products than
available from traditional bank

Greater level of trust than with

traditional institutions

Based on the responses given,

FinTechs main consumer appeal is its
easy user experience

In Germany, almost a third of FinTech

users cite ease of setting up an account
as the number one reason they use
these products

Access to new services plays a major

role for users in Germany

Neither trust nor product differentiation

are key reasons consumers choose
FinTech services over a traditional
institution, indicating that traditional
providers should focus on replicating
FinTechs easy account setup and user
experience to be able to compete
effectively

12,4%
18,9%
11,2%
9,4%
10,3%
15,2%

5,5%
8,2%
Global

1,8%
2,5%

Germany

1. All Global data in this analysis excludes Germany

Page 17

EY FinTech adoption index

Why are respondents not using FinTech

products?
Reasons for not using FinTech services
Global

Germany

53,2%
47,0%

29,0%

32,3%

27,7% 27,0%
21,3%
9,2%

11,2% 12,4%
0,8%

Was not aware

they existed

Did not have a

Prefer to use a
Don't understand
need to use them traditional financial how they work
services provider

Do not trust them

Observations

Need of use is the main hurdle to consumer adoption of FinTech products

Compared to other markets, German users are quite aware of the existence of FinTech services

Trust is not a major barrier

Page 18

EY FinTech adoption index

0,4%

Have used a
FinTech provider in
the past but don't
want to use one
again

Users seek independent online research nearly

as much as friends and family to select FinTech
Sources used to select FinTech provider
Friends and family (offline)

46%

Independent online research

Customers are using independent

online research almost as much as
advice from friends and family
(offline) when selecting a FinTech
provider

In fact, when looking at specific

FinTech products, independent
online research is used slightly more
than advice from friends and family
(offline) as a source for finding all
products, except for P2Ps and nonbanks to transfer money

36%

Comparison sites

31%

Media reports

30%

Online advertising

30%

Financial adviser

Page 19

43%

Friends and family through

social networking sites

Offline advertising (e.g., TV,

magazines, billboards)

Observations

26%
12%

EY FinTech adoption index

Summary

Page 20

EY FinTech adoption index

Summary of key findings for Germany

Overall adoption is below average: Germany has a lower adoption index than the
average of the surveyed markets. It shows that FinTech activities in Germany have
developed later and that the penetration of new products and solutions in this market
are delayed in comparison to other global markets
FinTech users are young: 18 to 34 year olds can be described as the most active
user group, even though the 35 to 54 age group is not far behind
Adoption is highest among high-income earners: consistent with all other markets,
the highest adoption rate is among high-income users (US $ 150,000+) at just above
40%, which is just below the average across all markets. This is in line with the high
money transfer and payments adoption rate, an area which has partially been smoothly
integrated into everyday life by service providers such as PayPal and other online
solutions. This group also has the funds and the incline to take more risks when it
comes to investing money, thus, making savings and investments the second most
popular segment among this group
Payments is leading: money transfers and payments shows the highest adoption
index rate among users which is also shown in the UK, while in all other markets, the
highest adoption rate is perceived for savings and investment products

Page 21

EY FinTech adoption index

Implications for banks and corporates

Threats to banks and corporates

Increased customer churn due to

FinTech start-ups

FinTechs are offering more

customer-centric and convenient
services

Traditional players are often

constrained by their culture: product
silos, legacy product suites and
pricing structures, as well as legacy
core IT systems

These factors result in cumbersome

user interfaces underpinned by
complex and manual processes

Traditional providers cannot use the

same flexibility and iterative design
approach for their products but will
have to find a way to adapt their
products to meet user expectations
(i.e. convenience)

Page 22

Opportunities to become engaged in the ecosystem

Re-think design
Apply design tools to research and test services:

Customer experience laboratories

Rapid-prototyping

Innovation labs

Partner
Work with FinTech providers to leverage their ideas and processes:

Inclusion of FinTech solutions as well as partnerships with FinTechs

to improve customer experience will be viable to maintain and
increase customer satisfaction

Incubate
Incubate FinTech operations within the institution:

Since the market is still in a nascent stage, it is still possible to gain

ground through active engagement in the market scene

Set-up of venture capital arms, accelerator/incubator programs

EY FinTech adoption index

Appendix

Page 23

EY FinTech adoption index

Methodology
EY surveyed 12,145 online users.

The survey was conducted via English language online questionnaires in 7

markets, being Germany, Australia, Canada, Hong Kong, Singapore, the UK
and the USA.

The survey targeted end consumers only. Respondents were asked about
their awareness and usage of a range of online financial services products.
All products were briefly explained to respondents and reference was made
to major brands present within the market.

They survey was pre-tested in the UK, with re-design work undertaken in
certain areas to address limitations.

All financial questions referenced local currency and were standardised into
US dollars.

The average time taken to complete the online survey was three minutes and
forty seconds.

The data was collected from September 2015 to December 2015.

Page 24

EY FinTech adoption index

EY | Assurance | Tax | Transactions | Advisory

Die globale EY-Organisation im berblick
Die globale EY-Organisation ist einer der Marktfhrer in der
Wirtschaftsprfung, Steuerberatung, Transaktionsberatung und
Managementberatung. Mit unserer Erfahrung, unserem Wissen
und unseren Leistungen strken wir weltweit das Vertrauen in die
Wirtschaft und die Finanzmrkte. Dafr sind wir bestens gerstet:
mit hervorragend ausgebildeten Mitarbeitern, starken Teams,
exzellenten Leistungen und einem sprichwrtlichen Kundenservice.
Unser Ziel ist es, Dinge voranzubringen und entscheidend besser
zu machen fr unsere Mitarbeiter, unsere Mandanten und die
Gesellschaft, in der wir leben. Dafr steht unser weltweiter
Anspruch Building a better working world.
Die globale EY-Organisation besteht aus den Mitgliedsunternehmen
von Ernst & Young Global Limited (EYG). Jedes EYG-MitgliedsUnternehmen ist rechtlich selbststndig und unabhngig
und haftet nicht fr das Handeln und Unterlassen der jeweils
anderen Mitgliedsunternehmen. Ernst & Young Global Limited ist
eine Gesellschaft mit beschrnkter Haftung nach englischem Recht
und erbringt keine Leistungen fr Mandanten.
Weitere Informationen finden Sie unter www.ey.com.
In Deutschland ist EY an 22 Standorten prsent. EY und wir
beziehen sich auf alle deutschen Mitgliedsunternehmen von
Ernst & Young Global Limited.
2016 Ernst & Young GmbH Wirtschaftsprfungsgesellschaft
All Rights Reserved.
www.de.ey.com