Strategy Note /

The emerging markets where fintechs should make the biggest gains

  • Our proprietary emerging markets consumer survey gives us a unique end-user perspective of the financial services sector

  • Fintechs should win share share across the board, most notably in South Africa. Gains in India will be modest

  • Incumbents will gain share in the Philippines but lose in Vietnam. Financial inclusion should improve everywhere

The emerging markets where fintechs should make the biggest gains
Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Tellimer Research
11 March 2023
Published byTellimer Research

We surveyed 900 consumers across 14 emerging markets, asking them to detail their current financial services providers and gauge what provision changes they expected over the next three years.

We summarise our findings below, with more detailed product-level data in the Appendix.

Fintech market share gains are mirroring better financial inclusion

In our 2020 survey, emerging market consumers gave fintechs 26% of their business. This has increased to 31% and should reach 37% in three years, according to their expectations. Future gains will likely come from better financial inclusion, with unbanked and underbanked customers disproportionately benefitting from fintech innovation.

One challenge for policymakers, though, is how to bring fintechs under the regulatory umbrella to protect consumers without stifling beneficial innovation. Consumers see formal and informal providers maintaining their market shares over the next three years, although the product mix is likely to shift significantly across the various provider types. 

Financial services provider market shares in EM

Key trends by market

We discuss below some of the key market share expectations highlighted by consumers across our 14 surveyed markets.

  • Fintechs are expected to win market share in all countries, but the biggest gains will be in South Africa, the Philippines and Nigeria.

  • Formal financial institutions (such as banks and insurers) are expected to win market share in the Philippines and Kenya but lose share in South Africa and Vietnam.

  • Informal channels should gain in Vietnam but lose out in Pakistan.

  • Financial inclusion should improve across the board, notably in the Philippines and Nigeria.

Expected 3-year change in financial services provisio

Current positioning

Fintech market share currently ranges from 39% in Indonesia to 19% in South Africa. Incumbent financial institutions have the highest market share in South Africa (57%) and the lowest level in the Philippines (35%). Financial exclusion is most relevant in the Philippines (29%) while informal providers are most active in Egypt (15%).

Financial services provider market shares

Projected positioning

Regarding the industry structure consumers expect in their countries in three years' time, fintech market share should be highest in Vietnam, Indonesia and China (all at 41%) and lowest in Mexico and Pakistan (31%). Traditional financial institutions will have the highest market share in South Africa (52%) and the lowest in India (36%). Financial exclusion is likely to be highest in Pakistan (15%) while informal providers will have the highest share in Egypt (14%).

Financial services provider market shares

Country commentary

Some additional findings from our survey at the country level...


Indonesia has the highest fintech market share in our survey, at 39%. According to our survey, it is likely to remain on top in the next three years as well. One contributory factor behind fintech’s success in this market is good internet penetration (76%, versus 69% median for its EM peers). Investors continue to believe in the sector: funding for Indonesian fintechs has increased in 2022, bucking the global downturn trend (funding totalled US$2.1bn inthe first nine months of 2022, above the full-year 2021 figure of US$1.6bn). Indonesia has one of the lowest informal channel market shares in our surveyed markets.


According to our survey, India currently has one of the highest percentages of the population that is using fintech and informal channels for their financial services needs: 37% and 14%, respectively. Unlike other surveyed EMs, where traditional financial institutions scored the highest market share, in India, fintechs and incumbents are at par. The strong showing of fintechs has undoubtedly benefitted from the Indian government’s Digital India initiative and the introduction of UPI, accelerating the growth in digital payments (according to data from the NPCI, in August 2022, UPI’s transactions rose by 85% yoy and the value of transactions rose by nearly 68% yoy).


Vietnam’s fintech market share is likely to grow from 36% to 41% over the next three years, according to our consumer survey. The Vietnamese government is taking steps to regulate the sector and ensure consumer protection, such as introducing a licensing system for payment service providers and setting up a fund to protect customers against losses due to fraud or insolvency. Also noteworthy, despite the poor reach of the banking system, Vietnam has the lowest level of financial exclusion of the 14 countries we looked at.


According to our survey, China fintechs are expected to match those in Vietnam over the coming three years, with their share rising 5% points to reach 41%. China’s large but relatively closed domestic market has allowed the country to nurture some world-class fintech firms. Digital payment volumes dwarf what we see in other markets (including anywhere in the developed world), which is beneficial for the adoption of other digital products. China’s advanced internet infrastructure, with three-quarters of the population having access, is also helpful.


Kenyan consumers expect the fintech market share to rise by 5% points to 40% over the coming three years. The level of financial exclusion is expected to drop by 7% points to just 3%, which would be the lowest figure among our 14 surveyed markets. This could be attributed to government initiatives, such as the Financial Inclusion Programme (FIP), which aims to expand access to financial services among lower-income households and smaller enterprises. The long-standing success of mobile money providers (such as MPesa) has also likely helped.


Based on our survey, the informal channel for financial services in Egypt is larger than elsewhere, with a 15% market share, and, despite likely declining to 14% in three years’ time, will probably retain its EM leadership. Egypt’s large informal economy means that formal financial services remain out of reach for much of the population, for reasons such as cost, availability and accessibility. Informal providers can also skirt past regulatory restrictions, potentially allowing them to be more flexible and responsive to demand. Turning to the fintech sector, consumers expect it to see a 6ppt rise in market share over the next three years, to 40%.

Saudi Arabia

Saudi Arabia’s fintech market share is currently 30% while the incumbents’ share is 49%. While after 3 years, incumbents’ share will remain the same, fintech share will increase by 2%. This is likely as traditional financial services are adopting a more innovative mindset and entering active partnerships with fintechs. According to Fintech Saudi's 2022 Annual Report, incumbent engagement is an important driver of the fintech ecosystem.


Consumers expect Brazil’s fintechs’ market share to increase by 7% points, to reach 38% in 3 years. Over the same period, the proportion of financially excluded individuals will drop by 6% points, to 10%. The key features that consumers value from Brazilian fintechs are low product costs and transparency in pricing and services.


Based on our consumer survey, Nigeria’s fintechs market share is going to increase by 9% points over the next three years, to reach 38%. Over the same period, the proportion of financially excluded customers will decrease from 19% to 9%. Nigerian consumers think that fintechs fare better than other financial services providers mainly because of providing convenience, competitive pricing, and development of new products.


According to our survey, Russia has one of the highest proportions of financially excluded individuals in larger EM. The vast geography of the country and wealth inequality, allied to large-scale sanctions, are likely contributory factors. Consumers see fintech market share rising from 28% to 34% over the coming three years.


The Philippines has the highest level of financial exclusion across our surveyed markets, at 29%,  and it also has the lowest market share of incumbents, at 35%. According to the Bank of International Settlements, this is due to a lack of access to banking services in rural areas, as well as the high cost of opening and maintaining an account. Additionally, there is a lack of awareness about the benefits of having a bank account and using other financial services. Consumers see the fintech market share rising from 27% to 36% over the next three years.


In Mexico, consumers project fintech share will reach only 31% in three years, which is the joint-lowest figure among our surveyed markets. The country suffers from poor financial inclusion, with around 60% of adults not having a bank account (World Bank). Also, according to Western Union, Mexico's regulatory environment has been slow to adapt to the growth of fintechs, making it difficult for new companies to enter the market.


Pakistan’s consumers expect fintechs will have only 31% market share in three years, the joint-lowest figure across our surveyed emerging markets (tied with Mexico). Also, consumers project financial exclusion will still be 15% at that time, which is the highest across the 14 countries we looked at. Around three-quarters of Pakistani adults do not have a bank account; our survey suggests most individuals do not expect any significant change in this statistic.

South Africa

South Africa consumers give traditional financial institutions the highest market share across our surveyed markets, at 57%. They also give the informal sector the lowest market share, at 4%. Looking ahead three years, consumers do not see these metrics changing much. In contrast, they see the fintech market share rising by 13% points (the highest delta across our surveyed markets), to reach 32% Comparing fintechs and incumbents, consumers cite poorer brand recognition and transaction safety as counting against the former. 


Our survey

We asked 900 adult consumers from all income groups across 14 emerging markets about their usage of financial services.

Note that the survey responses are unweighted; we think traditional financial institutions would have a higher market share if our survey were value-weighted.

Current product market shares

Based on our survey, overall fintech market share by product ranges from 22% for general and life insurance, and business loans, to 49% for mobile payments. The chart below highlights the current market share of fintechs for 11 financial products across 14 countries, based on our consumer survey.

Fintech market share by product

Projected product market shares

In three years, consumers see fintech market share in life insurance will once again have the lowest fintech share (but now up 30%) and mobile payments will have the highest (still at 49%). The biggest market share gains will be in general insurance and business/ property loans (both up 9% points). The chart below highlights the projected market share of fintechs (in three years) for 11 financial products across 14 countries, based on our consumer survey.

Fintech market share by product