China rapidly embracing fintech while Korea trails behind

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China rapidly embracing fintech while Korea trails behind

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Korea’s fintech adoption rate is less than half of China, according to a fintech trend report released by the Financial Supervisory Service on Sunday.

The financial watchdog cited the “EY FinTech Adoption Index 2017” report from global consulting firm Ernst & Young to compare the fintech adoption rate among 20 major markets across the world.

Fintech refers to financial technology within five broad categories of payments, financial planning, savings and investments, borrowing and insurance.

According to EY’s 22,000 online interviews in the 20 markets including Korea, Japan and China in 2017, the global fintech adoption rate on average reached 33 percent, up 17 percentage points from the same study in 2015.

Korea’s adoption rate was 32 percent, only slightly below the average.

China’s adoption rate, however, was 69 percent, more than double that of Korea. Emerging economies like India (52 percent), Brazil (40 percent) and Mexico (36 percent) all turned out to be more willing to apply top-notch technology to finance than Korea, according to the index.

A similar trend was spotted in another report issued by accounting and consulting firm KPMG and venture capitalist H2 Ventures dubbed the “2017 Fintech 100.” The report compiles a list of the 50 top established fintech firms and 50 emerging firms from around the world.

The first, second and third place on the list of leading firms were taken by Chinese companies, though the United States had the most companies on the overall list. The United States had 19 firms followed by Australia with 10, China with nine and the United Kingdom with eight.

Korea only had a single company on the list - Viva Republica, which operates peer-to-peer money transfer app Toss, widely used by young Koreans. The app became popular as it has offered an authentication-free money transfer service since February 2015.

The start-up was ranked 35th in the list of the leading 50 fintech companies.

According to the FSS, developed nations with established financial infrastructure tend to be slower in embracing the latest technological advances in the financial sector compared to developing countries, which are banking on tech for rapid growth.


BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]

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