This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here . The consultancy’s latest study found that financial services providers in emerging economies stand to gain $4.2 trillion in new deposits and could reap annual savings of $400 billion through digitization. Here are McKinsey’s key findings: Financial services providers could attract $4.2 trillion in new deposits, resulting in savings of $400 billion per year. New deposits can be attracted by offering digital wallets and accounts that enable users to receive remittances, salaries, and government benefits electronically rather than in cash. At the same time, shifting from cash to digital payments will reduce the costs associated with cash deposits, withdrawals, and remittances. China presents the biggest opportunity. McKinsey projects annual cost savings of $140 billion for financial services providers in this market. Digitization would raise $1.1 trillion in new deposits. Financial services providers in India would see the second-largest benefit. Here, annual savings from digitization would amount to $48 billion. New deposits would amount to $799 billion. McKinsey also pointed out that this opportunity is not limited to legacy providers. There are also possibilities for fintechs, which could enter emerging markets faster than incumbents since they would not have to digitize first. We think it likely that in addition to ongoing growth in home-grown fintechs in emerging markets, we will start to see Western fintechs moving into these regions to take advantage of the opportunities they present. Evan Bakker, research analyst for BI Intelligence , Business Insider’s premium research service, has put together an essential report on the fintech ecosystem that explains the new landscape, identifies the ripest areas for disruption, and highlights the some of the most exciting new companies. These new players have the potential to become the […]
