More than half of banking customers across the globe are now using the products or services of FinTech firms, despite trusting their traditional providers more, according to a new report.

The inaugural World FinTech Report 2017 (WFTR) , conducted by Capgemini and LinkedIn, in collaboration with Efma, surveyed more than 8,000 financial services customers across 15 countries as well as a number of executive interviews.

The report found that FinTechs are gaining momentum and mindshare amongst younger, tech-savvy and affluent customers. Emerging markets led the way in terms of adoption, with more than 75 percent of customers in China and India saying that they use services provided by FinTech firms, followed by the UAE and Hong Kong.

FinTechs were also found to have made the greatest inroads in investment management, where 17.4 per cent of customers rely on them solely and another 27.4 per cent use them in addition to their traditional providers. With so many FinTechs specialising in niche services, the WFTR also found that many FinTech customers (46.2 per cent) are using services from more than three FinTech providers.

However despite this, there is still a level of mistrust when it comes to FinTech adoption. For example, only 23.6 per cent of customers said that they trust their FinTech provider compared to 36.6 percent for traditional firms.

Customers cited the advantage of traditional financial institution over FinTech providers when it comes to fraud protection, quality of service, and transparency.

Penry Price, vice president of marketing solutions at LinkedIn, said: “Rising customer expectations for more personalised and advanced digital experiences, advancements in technology, greater access to venture capital, and lower barriers to entry have created fertile ground for growing FinTechs.

“FinTechs are largely gaining momentum by meeting needs traditional players have yet to address, but many FinTechs lack the transparency required to earn the trust of their consumer audiences to capitalise on these opportunities.”

Traditional financial institutions continue to face challenges the report highlighted, with less than half (44 per cent) of executives confident in their FinTech strategy.

Thierry Delaporte, head of Capgemini’s global financial services business unit, added: “With the exception of a handful of industry leaders, most firms are struggling to achieve positive results from their innovation initiatives with only 10 per cent of executives stating they have been very effective at achieving desired innovation results.”

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