Insurance one of most common uses of FinTech in Canada

Adoption of FinTech has doubled in Canada since 2015

 Of the 18% of Canadians using finance technology (FinTech), 10% are using it for insurance purposes–the third most common use of the growing technology.

Canadians’ most common uses of insurance FinTech (or InsurTech) involve premium comparison sites, activity-based health insurance, and auto insurance telematics, says Ernst and Young’s (EY) recently released 2017 FinTech Adoption Index.

Ahead of insurance, the most popular use of FinTech is for money transfer and payments (41%), followed by online savings and investments for 12% of Canadians.

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Since 2015, FinTech adoption has more than doubled from 8% to 18% in Canada, but this figure is still one of the lowest adoption rates globally, says the report. Worldwide, 33% of consumers have adopted FinTech–a figure which has also more than doubled from 16% since 2015. Two of the main reasons why Canadians aren’t adopting FinTech are because they hadn’t heard of FinTech or preferred traditional finance services.

The number of Canadians unaware of FinTech has decreased, however, dropping from 49% in 2015 to 22% in 2017. “Canadians know more about the FinTech options available than they did two years ago, and this trend is going to continue. When it comes to banks and FinTechs, we’re seeing what used to be a competitive mindset turn into a desire to collaborate. Working for mutual benefit, rather than competing with each other, will result in more meaningful innovations, faster,” says Ron Stokes, EY Canada’s FinTech leader, in a press release.

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Due to the increasing rate of collaboration between financial institutions and tech firms, FinTech adoption in Canada is anticipated to grow to 34%, says the report. “Banks are looking for faster and easier ways to boost their digital capabilities, both on the consumer side and in the back office. At the same time, Canada’s FinTechs need access to more customers and resources to improve their offerings,” says Stokes.

Of the Canadian consumer segments, FinTech services are most popular among young Canadians between the ages of 18 and 34, which make up 58% of total users. Consumers using the technology are attracted to the simplicity, transparency and personalization, says EY. But many Canadians’ preference for traditional financial services means the FinTech sector will need to continuously innovate.

Globally, the two countries that have the highest adoption of the technology are China (69%) and India (52%). With the rate of adoption increasing and the amount of consumers using two or more FinTech services growing alongside (33% globally and 18% in Canada), EY says FinTech is poised for mainstream adoption worldwide.



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