Russia Joins World’s Top Fintech Markets: Report

Russia has become the third most developed market in the world, as more than 80% of the country’s citizens use some sort of fintech service, a new study by Ernst & Young has revealed, according to bne Intellinews.

The most popular financial service among Russians are money transfers and payments, the study revealed. Russia (82%) is behind only China and India (both at 87%) when it comes to penetration of fintech services, but ahead of South Africa and Colombia. About 90% of the country’s residents have used a fintech service at least once.

When it comes to other fintech services, the awareness level is pretty high, at between 81% and 86%, but there are services that Russians hardly use at all, such as investment in securities, Ernst & Young said.

The study’s authors note that the discrepancies in penetration between different types of fintech services reflect those in the financial sector in general, as fintech development patterns normally follow those of the traditional finance market.

The study also points to high potential in such areas as budgeting and financial planning, as well as savings and investment.

Russia’s financial system is relatively young, which makes it less conservative and easier for customers to embrace innovations, analysts say.

“Russia’s financial system began to develop relatively recently, and, as a result, it is not that conservative as in Europe,” Roman Prokhorov, head of the association Financial Innovations, was quoted as saying by Russian business daily RBC.

“Basically, we went from [Soviet era-style] savings books to payments over mobile phone almost overnight,” he went on to say. “Therefore, our consumers are more receptive to fintech innovations, and this explains the popularity of these services.”

Among all users of fintech services in Russia, 27% pointed to better rates and tariffs as the main advantage. Another 26% mentioned the easiness of registration and creating a profile and 24% said access to a wide variety of innovative products and services was the decisive factor.