Singapore's fintech adoption has increased from 15 percent in 2015 to 23 percent in 2017, according to the latest EY FinTech Adoption Index.
Money transfers and payments (38 percent) as well as savings and investments (17 percent) saw good penetration in the market, though adoption of borrowing (3 percent) and financial planning services (4 percent) were particularly low.
EY expects fintech adoption in Singapore to increase to 56 percent with more usage by both the older generation and millennials.
Currently, 22 percent of the 45-64-year olds respondents are digitally active while 15 percent of those over 65 said they use fintech services regularly. As for millennials, they were found to 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.
In order for financial institutions and fintech collaborations to be successful, fintech companies in Singapore must be able to get access to customers and scale to build a sustainable business model.
"While FinTech adoption levels in Singapore are lower than the global average, the groundwork has been laid and its anticipated penetration will increase across all categories in the next 12 months, with the highest growth expected from borrowing platforms and financial planning tools," said Liew Nam Soon, EY Asean Financial Services managing partner, Ernst & Young Advisory.
EY also found that 40 percent of fintech users regularly use on-demand services such as food delivery, while 44 percent of fintech users regularly participate in the sharing economy like car sharing. Only 11 percent of non-fintech adopters use either of these services on a regular basis.
Besides that, the Index revealed that emerging markets are driving much of the fintech adoption globally, with China, India, South Africa, Brazil and Mexico averaging at 46 percent.
Both China and India have seen the highest adoption rates of fintech at 69 percent and 52 percent respectively.
Fintech firms in these two nations have been successful at tapping into the tech-literate but financially under-served segments.