We've seen some huge deals in 2017, from Qualcomm/Broadcom earlier in the year, to Gemalto/Atos in the last few weeks. We also had the 10-year anniversary of the financial crisis and the seating of Donald Trump into power.

As part of this week’s Your Thoughts, Finance Monthly reached out to experts far and wide to ask about their favourite moments in this financial year, from the most significant changes in regulation and announcements of further regulatory developments, to highlights of the most impacting acquisitions and mergers in the UK and beyond.

Andrew Boyle, CEO at LGB & Co.:

A key 2017 highlight for me surrounded Brexit and came in November at an event organised by the Edinburgh law firm Turcan Connell, which featured an SNP MP and a Conservative MEP. I expected a lively but entrenched debate carried out in a partisan fashion. To my complete surprise, the mood at the event was calm, points were made politely and there was an obvious willingness to compromise. It seems this more constructive spirit foreshadowed that of subsequent UK/EU negotiations given the breakthrough in talks with the EU and the clear indication that all parties, including the EU Commission, wanted to move forward. At the moment, the prospect of a transition period will keep the financial markets and company directors guessing what the final outcome will be. However, it is becoming increasingly clear that a failure to reach a deal will be in the interest of neither of the parties, whose economic viability is so deeply intertwined. I hope the new more constructive mood continues into the New Year.

Another highlight was the Budget. Fears of a radical change to EIS and VCT investing rules were unfounded. The Chancellor did refer to limiting EIS investment that shelters low-risk assets, but he offset this by promising increased EIS limits for investing in knowledge-intensive companies.

Continued support for early-stage businesses is key to what the Chancellor described as Britain’s position at the forefront of a technological revolution. UK SMEs will increase their total economic contribution to £217bn by the end of the decade –up significantly from 2015. In spite of the economic uncertainty around Brexit, British SMEs remain hungry for growth and are generally optimistic about the future. What often holds them back is a lack of funding, particularly through conventional avenues. SMEs often need to raise money quickly to adapt to changing markets or new opportunities, but obtaining bank financing can be a slow and cumbersome process – and that’s where EIS and VCT investors and indeed alternative lenders can help fund the gap. Specific measures announced in the Chancellor’s budget were positive for companies and investors. For now, government policy remains to support innovative companies notwithstanding the pressure to reduce tax breaks and apply funds elsewhere.

Richard Anton, General Partner, Oxx:

The biggest financial story of 2017, in the world of venture capital and technology start-ups and scale-ups, was the European Investment Fund suspending investment in UK VC firms. As an immediate result of the Brexit vote, FinTech lending was the first to suffer, before full suspension of investment into UK VCs. The EIF had been by far the single largest funder of UK venture capital firms and with the options for supply reduced so significantly, not only does this make competition for funding even more intense, the lack of on-the-ground European experience presents yet another challenge to businesses trying to grow to the next stage.

Thankfully, the British Business Bank has moved quickly to help mitigate the EIF’s withdrawal. The £1.5 billion Enterprise Capital Fund programme has got to work to support UK-based start-ups, recognising that the entire market needs to see small firms confident to apply for finance in order to grow. Perhaps the most encouraging indication that British funding is filling the void is the success of Episode 1 Ventures in recently raising £60m for its fund targeted at British early stage start-ups - £36m of this coming from the British Business Bank.

The withdrawal of the EIF shook up the market more than perhaps was covered at the time. Of course for any business to survive and grow, it needs to adapt to a range of situations, yet the sudden absence of European funding was particularly challenging. It is also one that will have long-term ramifications and when the dust settles the European funding market will look very different.

Peter Veash, CEO, Bio:

Amazon’s purchase of Whole Foods in August is my most significant financial moment of 2017. The deal was lauded by many industry pundits as a match made in heaven, with Whole Foods’ glowing reputation for offering high-quality goods marrying with Amazon’s unsurpassed track record for fast, efficient logistics – a new retail power couple was born.

The upshot? Aside from a slashing of prices across the board at Whole Foods (many by up to as much as 40%), the deal also meant that Amazon tech like the Echo, Dot, Fire and Kindle products are now available to purchase instore, while Whole Foods products are now available to buy online via Amazon. ‘Try before you buy’ Amazon Pop-Up stores have opened in locations all over the country, and Amazon Lockers have also been introduced instore, allowing customers to pick up packages and drop off returns. The deal has also given rise to rumours around the potential roll out of Amazon concept stores, including cashier-free checkouts, which would allow Amazon to push commerce tech to a new level.

The $13.7 billion megadeal knocked some competitor share prices sideways and boosted Amazon's – it rose so much on the news that some were saying they’d essentially bought it for nothing. Most importantly, it gave Amazon the physical outlets to develop the future of truly omnichannel retail, particularly within the coveted fresh grocery market (which the ecommerce giant had been preparing to attack for some time).

Marina Cheal, Chief Marketing & Customer Officer, Reevoo:

2017 marked 10 years since the financial crisis, and it’s been a story of reputations - new players trying to forge a new one, and old ones clinging desperately on to theirs.

The world’s big banks took a spectacular fall from grace, the likes of which hadn’t been seen since The Great Depression: after being perceived as trustworthy, powerful corporate behemoths for decades, consumer trust in these institutions was at an all-time low, with many feeling shaken and disillusioned by the lack of ethics displayed by those responsible for the crash.

Meanwhile, a new breed of disruptive, digital-first fintech brand was evolving to challenge the status quo. In 2017 this group of app-based banks have broken the mainstream. Monzo, Starling, Atom and others are now household names, appealing in particular to Millennials who came of age during the crisis years and had the least trust in the financial sector.

Where big institutions once represented trust, newer and nimbler banks have taken their place. Legacy is a dwindling commodity, replaced by convenience and transparency.

What we’re seeing is the next stage on the road to rebuilding consumer trust, but what people want most of all now is a sense that they are in control of their own money, coupled with an ease of use and friendly, authentic communications from their bank – and right now, the challengers are beating the legacy brands to the punch.

Howard Leigh, Co-Founder, Cavendish Corporate Finance:

This year’s November Budget was my highlight for 2017 as it provided some welcome news for the UK’s thriving Financial Services industry and saw the Chancellor confirm his commitment to maintain the UK‘s leading position in technology and innovation post-Brexit. Although it was anticipated by some that EIS and SEIS investments, were going to be in the Chancellor’s firing line, he instead doubled the EIS investment limits for “knowledge-intensive” companies, demonstrating the Government’s commitment to help UK start-ups. The Chancellor also chose to continue supporting Entrepreneurs’ Relief, which, along with other business-friendly policies, is predicted to support the inflow of billions of pounds worth of investment into growth businesses.

With Britain soon to lose access to the European Investment Fund, it was encouraging to see the Chancellor outline his plans to establish a new dedicated subsidiary of the British Business Bank to become a leading UK-based investor in patient capital across the UK. The new subsidiary will be capitalized with £2.5 billion. and will provide a cushion if negotiations with the EIB and EIF do not encourage then to continue investing in the UK. I hope, as some of it is our money and London is clearly Europe’s centre of social impact investing the EIF will now recommence its activities in the UK.

Finally, another key measure in the Budget was the introduction of a policy that will compel online ecommerce companies, such as eBay and Amazon, to police their own websites, thus helping to stem the £1.2 billion yearly tax loss due to fraudulent sales. I first raised this issue in an Oral question in the Lords some 2 years ago and am delighted to see that the campaign run largely with VatFraud.org and Richard Allen has been successful.

The Autumn Budget was a pivotal moment for the UK’s Financial Services sector and the policies laid out by the Government firmly position it as a friend to business. Not only will these policies help to boost UK businesses in the tech and digital sectors, but it will help enhance the City’s position as a leading global centre for finance and innovation.

Tsuyoshi Notani, Managing Director, JCB International (Europe) Ltd:

PSD2 can revolutionise retail banking, generate further investment into fintech, and drive innovation. We’re focused on increasing partnerships with PSPs and fintech firms, enabling them to secure global reach as a gateway to Asia, so February 2nd, when the UK government confirmed its PSD2 timetable, was a really promising step in the sectors’ quest to level the playing field."

We would also love to hear more of Your Thoughts on your favourite moments of 2017’s finance world, so feel free to comment below and tell us what you think!

Using the website Numbeo to compare the prices of items from all over the world, giffgaff money has found the global destinations (and no-go zones) for anyone looking to save money.

Residents of London, New York, Paris and Amsterdam, look away now. Research into the world’s cheapest and most expensive countries has found that rent in Egypt is incredibly cheap, averaging at ­just £114 a month for a one-bed apartment in the city. Although you might feel a little better to know that a city centre apartment in Hong Kong would set you back £1,562 a month.

Categories used included every day and essential purchases including cars, rent and groceries which giffgaff have used to create maps and graphs to illustrate the vast cost gap in each category.

• Iceland, which consistently has one of the highest costs of living in the world, topped three categories: food and drink, groceries, and clothing and shoes.
• Switzerland also made several top-five appearances, proving most expensive for sports and leisure.
• Tunisia, on the other hand, was consistently one of the world’s cheapest countries and was found to have the cheapest food and drink in the world.

Rent

Living in a city apartment in Hong Kong is simply not possible for most of us, with a monthly rent average of an incredible £1,562 a month. Families hoping to live in the city centre will also face mind-blowing monthly costs, with a three-bed home stretching to £3,715 a month in rent.

Residents of London, New York, Paris and Amsterdam, look away now – rent in Egypt is incredibly cheap, averaging at ­just £114 a month for a one-bed apartment in the city. Families will also save, with a three-bed suburban home costing around £170 a month to rent.

Cars

Driving the picturesque landscape of Eastern European Georgia is a cheap affair, with a Volkswagen Golf priced around £12,072 (compared to £23,638 in the UK) and a Toyota Corolla coming in at just £13,621 (compared to £ 23,724 in the UK).

Singapore, on the other hand, is a pricey place for drivers, with a nippy Volkswagen Golf setting you back an eye-watering £88,474 – a massive £76,406 more than buying the same vehicle in Georgia.

For full results from the research, click here.

(Source: giffgaff)

With recent news that the pound took a tumble over the weekend, partly attributed to the future of Theresa May as Prime Minister and the upcoming EU summit, rumours that China is looking to open its finance sector up to more foreign ownership, and updates on the latest trade announcement being teased by US President Trump after he pretty much told Japan they ‘will be the no.2 economy’ here are some comments from expert sources on trade worldwide.

Rebecca O’Keefe, Head of Investing at interactive investor, told Finance Monthly: “European markets have opened relatively flat, with the FTSE 100 the main beneficiary after sterling’s latest fall, as pressure mounts on Theresa May who is struggling to maintain her grip on power. The gravity defying US market has been the driving force behind surging global markets, so investors will be hoping that the Republicans can get their act together and deliver key US tax reform to help support the path of growth.

In sharp contrast to Persimmon’s lacklustre results and a gloomy report from the RICS last week, Taylor Wimpey’s trading update is much stronger and paints a relatively rosy picture of the current housing market. Confirmation of favourable market conditions and high demand for new houses is good, although there are early warning signs that the situation might deteriorate, with slowing sales rates and a drop in its order book. Share prices have already come off recent highs, amid fears that the sector had got ahead of itself and investors will be hoping for more help from the Chancellor in next week’s budget to try and provide a new catalyst for the sector.

Gambling companies have been making out like one armed bandits since the summer, as expectations grow that the Government will compromise on a much higher figure for fixed odds betting terminals than the £2 maximum suggested during this year’s election campaign. However, while betting shops are the focus of attention for politicians, the real action can be found on smartphones and elsewhere – with surging revenues and profits being driven from online betting. Companies who have got their online strategy right are the significant winners and although Ladbrokes Coral has seen a 12% jump in digital revenues, the comparison against online competitors such as bet365 and Sky Bet, who both reported huge revenue growth last week, has left the market slightly disappointed and sent the share price lower.”

Mihir Kapadia, CEO and Founder of Sun Global Investments, had this to say: “The last couple of days have seen two of the big global economies China and Germany report large trade surpluses underlining their robust performance over the year. In contrast, the UK economy has been on a downbeat weakening trend as Brexit and political uncertainties lead to declining economic confidence and slower growth.

Data released last month showed August’s trade deficit at £5.6 billion, and in comparison, today’s data of £3.45 billion for September has been a better than expected improvement, but nevertheless indicative of an additive gap that appears unlikely to be closed anytime soon.

While Brexit uncertainty has weakened the pound against its major peers, it had helped boost exports but in turn has also made imports more expensive. This is the short term “J Curve” effect which is often seen after a devaluation.  Over the long term, the weaker pound is perhaps likely to help the trade deficit as exports rise (due to the lower pound and higher growth in the global economy) while import growth slows down due to the slowdown in the UK.”

Blockchain will disrupt everything from Silicon Valley to the New York Stock Exchange.

A recent study from Forex Bonuses finds the countries among the 20 largest economies who are adapting quickest to using cashless systems like phones and contactless cards – revealing that Canada narrowly edges out Sweden for the top position.

The economies adopting the most cashless technology have been revealed in new research from global trading site Forex Bonuses.

Investigating twenty of the world’s most significant markets, the study looks into contactless card saturation, number of debit and credit cards issued per capita, usage of cashless methods, growth of these cashless payments, and the proportion of people who are aware of which mobile payment services are available. From these six metrics an overall ranking was calculated.

Cashless Economies

The top position has gone to Canada, who, while only having contactless functionality in 26% of their cards (compared to 41% in the UK and 56% in China) and the lowest number of debit cards per capita included in the research (0.7), were found to have over two credit cards per person, a figure only exceeded by their neighbours in the US, who had just under three.

Likewise, the majority of their payments were made using cashless means at 57% of transactions, outmatched only by 2% in both Sweden and France. The UK reached 52% on this scale, while China, despite the majority of cards being contactless, used cashless methods in only 10% of transactions. China were also the most educated on mobile payment services, with 77% of survey respondents claiming they were aware of the options available to them in this regard. In comparison, only 47% in the UK claimed the same.

(Source: Forex Bonuses)

The average British earner would have to work for a staggering 35,715 years to make a billion and join the world’s top tycoons, as revealed in a newly launched innovative tool.

Budget Insurance reveals a wealth of stats and facts about the world’s richest people, demonstrating how average UK workers stack up against top tycoons like Mark Zuckerberg and Bill Gates in ‘The World’s Richest: How Do They Compare?’.

Daydreaming about striking it rich or how many pay cheques it would take to save a life-changing financial sum is common. Discover how average British earners really compare to the world’s richest and take a deep dive into their traits, exploring comparisons over the last decade and even seeing how many years of hard graft are required to join that prestigious world rich list.

In its latest discovery piece, Budget Insurance reveals that a worker in the UK on the average wage of £28,000 would need to work roughly 35,715 years to make their first billion.

The results also reveal that the net worth of those gracing the rich list has increased by $26.88 billion (78%) over the last decade. The average net worth of the world’s current top 10 richest is $61.28 billion[1] whilst, in contrast, the average British person currently has a net worth of £147,134.[2]

The average worker’s net worth may not be as jaw-dropping as that of the world’s most affluent, but it is imperative for everyone to safeguard assets like health and the home by ensuring that the right insurance cover is in place. Yet despite the huge differences in assets between the world’s richest and the average worker, there are some surprising similarities. Government statistics indicate that 32% of Brits have two or more cars, much like the billionaires in the top 10, who typically own between two and three cars each.[3] However, a rough estimation of annual insurance of £575 for a 2017 Ford Focus pales into insignificance against the cost of insuring Bill Gates’ Porsche 911 Carrera at £2,794.52.[4]

Anna McEntee; Associate Director Consumer Marketing; Frontline at Budget Insurance, said: “It’s fascinating to hear how the other half lives. We imagine they probably all have an army of assistants to keep them on top of their household admin – but whether that’s the case or not, we’re sure it’s just as important to them as it is to us to ensure they have the right insurance to protect the things they hold dear.”

From net worth to hair colour, height to children, the piece compares the traits of today’s richest and pits them against data over the last decade.

What’s more, the insurance provider has delved into how much money the world’s richest have donated to charity, their Twitter followers and the number of times they’ve been married, amongst other personal traits like car and home ownership.

The 10 Richest People in the World 2017[5]

• Bill Gates
• Warren Buffett
• Jeff Bezos
• Amancio Ortega
• Mark Zuckerberg
• Carlos Slim
• Larry Ellison
• Charles Koch
• David Koch
• Michael Bloomberg

(Source: Budget Insurance)

[1] https://www.forbes.com/billionaires/list

[2] http://www.dailymail.co.uk/news/article-2574038/Average-British-person-net-worth-147-134-0-01-cent-David-Beckham.html

[3] https://www.gov.uk/government/statistics/road-use-statistics-2016

[4] https://www.comparethemarket.com/

[5] https://www.forbes.com/billionaires/list/

President Trump claims to have well over $10 Billion dollars but his finances are still kept very secret. So how much money does Donald Trump really have? Watch this video and find out.

People are paying more for their homes around the world, with average house prices up 6.5% in the last 12 months.

But, where have house prices grown faster than the average income?

Assured Removalists have combined data on average annual salary, income tax and house prices to produce a ratio that shows the measure of housing affordability around the world. The higher the ratio is, the less affordable the houses are.

How does your country compare? You can view the full data set here.

According to Forbes, voters concerned about immigration helped swing both the Brexit vote and the election of Donald Trump to the winning ends, but this goes beyond the UK and US’ big socio-political decisions. In many countries now workers are putting pressure on lawmakers to oppose the perceived threat of immigration.

This in turn allegedly affects regional and sector markets and the global economy a great deal. This week Finance Monthly heard from several specialist sources on the various ways immigration changes and public opinion on immigration are or aren’t shaping local and global economies.

Tijen Ahmet, Immigration Specialist, Shakespeare Martineau:

Positive news about migrant workers is often overlooked. As immigration is regularly at the forefront of news and political debate, migrants - whether filling highly-skilled or low skilled jobs - often bring benefits to their host country that directly impact on global business.

The invaluable knowledge and talent from the highly skilled, and the filling of key occupations by the low skilled, can decrease unemployment and increase income capacity with no negative influence on public finances. Most significantly, migrants allow businesses to expand their workforce to meet their growth potential.

UK corporates across the retail, IT and financial services sectors in particular, are beginning to seek their migrant workforce from new markets that they would not have ordinarily considered, forming alternative relationships with fresh customer markets.

There is an assumption that all migrant workers are low skilled and this just isn’t the case. Migrants from a global arena not only fill talent deficits in the host labour market, but can also offer a diverse skillset that may be lacking in the host country. Such skills can generate more cross-border new business opportunities by opening communication up to new markets, while knowledge transfer can assist in upskilling existing co-workers.

Due to restrictions of free movement between the UK and EU global businesses have the opportunity to select the most suited candidate from a much wider pool of talent by casting the net more widely.

With Brexit negotiations unfolding, it is likely that immigration laws will continue to change frequently and directly impact global businesses as a result. Such quick changes to immigration laws, such as those revealed in the Queen’s Speech can cause significant instability in currency markets, causing drastic fluctuations.

Although businesses with bigger profit margins are less sensitive to currency fluctuations, increased exchange rate volatility combined with the complex structures of most global businesses, means that monitoring trading activity is now essential, no matter the size or scale of the business.

The UK’s decision to exit the EU, where immigration was a commonly considered factor for the leave campaign, provided a strong example of fluctuating currency rates. For example, immediately after the Brexit vote there was a sharp drop leaving GBP to EUR 15% lower than pre-Brexit and GBP to USD and AUD down 17%, having a significant direct financial impact on global business.

Guilherme Azevedo, Associate Professor in Business & Society, Audencia Business School:

In December 2015, Prime Minister Justin Trudeau went to Toronto’s airport to receive Syrian refugee families. When handing them winter coats, he repeated many times: “Welcome. You’re safe at home now”. Refugees to Canada arrive as permanent residents and receive support to become full-fledged citizens as swiftly and smoothly as possible. The families are sponsored by local communities, bodies of government, churches, and individuals who provide them with money and housing for one year. Many of them become economically autonomous and start to give back to society before that year is over.

Trudeau’s statement goes further than expressing the values of solidarity that most Canadians cherish. It makes good economic sense. The integration of migrants into the fabric of a nation has net economic advantages—and even more so to developed economies with low birth rates. Research shows that those who move to a new country in the pursue of a better life work harder, are more entrepreneurial, create more wealth, and even win more Noble Prizes than the rest of the population.

Of course, the results are not so positive when immigrants came to do backbreaking work but receive virtually no rights—as, for instance, those coming to Germany following the 1950’s and ironically called Gastarbeiter (meaning ‘guest-workers,’ as if guests should be expected to do the hard work). Or when, despite French Law and the very principle of égalité saying otherwise, the grandchildren of colonial wars returnees continue to be perceived as second-class citizens. In these cases, full integration will take much longer. But suitable integration helps the host economy to remain vigorous and innovative. Just look at the business, the cultural, and the scientific landscapes in the U.S. and you see the power of first-, second-, and third-generation immigrants. They are the ‘American dream.’

Hence, when it comes to immigration, what is bad for economy is misinformation and ignorance. Trump’s election and the Brexit voting have been the result of populist maneuvers. The Polish plumber, the Mexican rapist, the Islamic fundamentalist, and etcetera (remember the greedy Jew from the Nazi?), are xenophobic fabrications without empirical relevance to national economies. They are mere rhetoric puppets and scape goats.

Populism depends on people believing that a simplistic plan will solve a complex problem, which can only happen if there is misinformation and ignorance. Irresponsible journalism also carries a share of blame on both Trump’s election and the Brexit voting. In the first, the Democrats-inclined media (mostly CCN) gave extraordinary coverage to Donald Trump since the very beginning of the primaries because it was good for the audience rates. When the bad joke went too far, they couldn’t stop it anymore. (But, again, can we consider democratic an electoral system that is so anachronic and so scandalously influenced by big capital?) In the case of Brexit, the British media remained oddly silent for at least a decade of demagogues blaming the fictitious lazy Europeans for their domestic problems. Here goes the simplistic promise: “If your life is not as good as you wished, just exit Europe and the problem will be solved”. Well… that’s not so elementary my dear Watson.

Finally, if we step beyond analyses of national economies and look at the global business, the conclusion remains the same, just more obvious: barriers to migration (as well as barriers to flow of capitals and goods) create distortions to currency fluctuation and to markets’ values, not the other way around. Closing boundaries is a path leading back to economic obscurantism and stagnation.

Bottom line: perceived economic threats due to immigration are hugely overstated. The real problems are ignorance and populisms, which can be solved through decent education systems, responsible journalism, and freedom of speech.

James Trescothick, Senior Global Stretegist, easyMarkets:

In recent times, nothing has provoked more debate or in many cases fear in the general populous more than the immigration topic.  In fact, in 2016 we saw two major surprises, first the Brexit result and then Donald Trump winning the US election.  Many believe the reasons for these surprise outcomes were that voters making their decision based upon their concern about immigration control.

But let’s answer this question; is immigration really a burden or is it actually a benefit?  The answer is it can be both, but it leans towards being a benefit.

How many times have you heard the outcry of “they take our jobs” from those of the public who tend to fear migrants coming into their countries?  Let’s face it, it is often the first protest we get.  But statistically speaking this is more than often not the case as the jobs that migrants take are the jobs that no one wants or are in totally different fields.   The economic impact of migrants can be calculated but looking at the taxes and other contributions they make and deduct the benefits and services they receive.

If of course they receive more than are putting into the economy then they do indeed become a burden, but more often than not, countries have benefitted from immigrants and have seen expansion in economic output in the long term.

When it comes to currency fluctuations and the markets, there is no short-term impact from immigration, as the markets perform based on current and projected economic performance.  The outcome of increased immigrants would not show signs if they are indeed a burden or benefit for many years.

Immigration is really a tool for politicians to spark debate and win votes and not a driving a force for the markets.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

Forbes Power Women reveal their greatest career lessons, obstacles and advice for the next generation of women leaders.

Entrepreneurs are getting younger and younger. So young, in fact, the latest crop of founders includes CEOs who haven’t yet legally become adults – some aren’t even old enough to drive.

Here are 10 Young Entrepreneurs who didn’t let age hold them back.

Levels of financial technology (FinTech) adoption among consumers has surged globally over the past 18 months and is poised to be embraced by the mainstream, according to the latest EY FinTech Adoption Index. An average of 33% digitally active consumers across the 20 markets in the EY study now use FinTech.

The study, based on 22,000 online interviews with digitally active consumers across 20 markets, shows that the emerging markets are driving much of this adoption with China, India, South Africa, Brazil and Mexico averaging 46%.

China and India in particular have seen the highest adoption rates of FinTech at 69% and 52%, respectively. FinTech firms in these countries are particularly successful at tapping into the tech-literate but financially under-served segments, according to the study.

The UK has also shown significant growth, with adoption rates now standing at 42%.

The EY FinTech Adoption Index evaluates services offered by FinTech organisations under five broad categories – money transfers and payments services, financial planning, savings and investments, borrowing and insurance. It reveals that money transfers and payments services are continuing to lead the FinTech charge with adoption standing at 50% in 2017, based on the consumers that were surveyed. 88% of respondents said they anticipate using FinTech for this purpose in the future. The new services that have contributed to this upsurge include online digital-only banks and mobile phone payment at checkout.

Insurance has also made huge gains, moving from being one of the least commonly used FinTech services in 2015 to the second most popular in 2017, now standing at 24%. According to the study, this has largely been due to the expansion into technologies such as telematics and wearables (helping companies to better predict claim probability) and in particular the inclusion and growth of premium comparison sites.

Imran Gulamhuseinwala, EY Global FinTech Leader, says: “FinTechs are clearly gaining widespread traction across global markets and have achieved the early stages of mass adoption in most countries. The EY FinTech Adoption Index finds, on average, one in three consumers already consume FinTech services on a regular basis. FinTechs, particularly in the payments and insurance space, have been very successful in building on what they do best – using technology in novel ways and having a laser-like focus on the customer. It really is now a critical time for traditional financial services companies. If they haven’t already, they need to urgently reassess their business models to ensure they are able to meet their customers’ rapidly changing needs. Disruption is no longer just a risk – it is an undisputable reality.”

According to the study, 40% of FinTech users regularly use on-demand services (e.g. food delivery), while 44% of FinTech users regularly participate in the sharing economy (e.g. car sharing). In contrast, only 11% of non-FinTech adopters use either of these services on a regular basis.

The demographic most likely to use FinTech are millennials – 25–34-year olds, followed by 35–44-year olds. The study revealed that people in this age range are comfortable with the technology and that they also require a wide range of financial services as they achieve milestones such as completing their education, gaining full-time employment, becoming homeowners and having children.

There is however also growing adoption among the older generations: 22% of digitally active 45–64-year olds and 15% of those over 65 said they regularly use FinTech services.

The study has also identified a new segment of users, the ‘super-user’. These individuals use five or more FinTech services and account for 13% of all consumers. ‘Super-users’ generally consider FinTech firms to be their primary providers of financial services.

The EY FinTech Adoption Index says that FinTech adoption is set to increase in all 20 markets covered by the study. Based on consumers’ intention of future use, FinTech adoption could increase to an average of 52% globally. The highest proportional increases of intended use among consumers is expected in South Africa, Mexico and Singapore.

Imran Gulamhuseinwala says: “There are those who believe that FinTechs struggle to translate the innovation and great customer experience that they create into real customer adoption. The EY FinTech Adoption Index suggests that thinking is now outdated.

“FinTechs are not only becoming significant players in the financial services industry, but are also shaping its future. Their new propositions are increasingly attractive to consumers and this trend is only set to continue as awareness grows, concerns are allayed and new advancements are made. Traditional firms, who sometimes struggle to deliver the same seamless and personalised user experiences, will undoubtedly need to step up their efforts to remain competitive. I think it’s likely that we will see greater collaboration between traditional firms and FinTechs in the future.”

(Source: EY)