Bengaluru: India ranks second only to China in terms of fintech adoption rates, according to an EY survey. That number is likely to improve going further as India’s fintech landscape grows. And one of the key trends that EY expects to see in the space over the next few years is the rise of more digital-only companies, especially in the insurance segment.

“There are two markets that are off the charts in terms of adoption of fintech products—China and India. We looked at digitally active users—people who have got a smartphone and a data connection and are starting to use the internet," said Mahesh Makhija, partner advisory, financial services, EY India.

EY’s survey of over 20 markets and over 20,000 customers across the globe in 2017 found that the average adoption rate was 33%. But China and India far outstrip that rate, leaving behind even developed markets like the US and UK, with 69% and 52% adoption rates, respectively. The US’s adoption rate is in line with the 33% global average, while the UK’s is around 42%.

The survey measured adoption rates and trends across five key areas—money transfer and payments, borrowing, financial planning, insurance, savings and investment. India scored a high number two in three of those areas and was among the top five across all.

“Within the next two years, there is going to be a spate of digital-only insurance companies because there are many use cases emerging there, too. That’s one trend we are seeing," Makhija said.

Payments will continue to drive a lot of innovation in the fintech segment, along with lending. The customer experience in the lending area is being improved by fintech companies, and banks are also sometimes partnering with fintech companies to do so. For instance, banks partner with fintech start-ups to allow existing customers to get loans within three clicks.

Voice and artificial intelligence (AI) technologies are also going to play a big role going forward, according to Makhija. He believes voice is probably the biggest transformative technology on the cusp. “Our kids talk to appliances all the time, for instance. If I’m going to take a loan from somebody (in future), there’s no need for me to fill out a form. I can have a conversation with an AI-enabled agent, give him my information that will get processed and make the entire experience seamless. Also linked to voice is vernacular—there are a bunch of fintechs attacking the vernacular. That’s going to be big," he said.

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