According to the new report “The Rise of Fintech in China” by DBS and EY, China has outpaced London, New York and Silicon Valley to become the world’s undisputed global fintech leader. Neal Cross, DBS chief innovation officer, indicated that favorable government policies and regulations contributed to the growth of a thriving fintech ecosystem, powered by billion dollar tech innovators such as Alibaba, TenCent and Baidu.

“The speed at which China’s fintech landscape has developed is truly remarkable,” added Cross. “It’s gotten this far because China’s landscape has operated in a sandbox-like environment conducive for FinTech to thrive — a strong domestic market, coupled with a constant push for innovation and experimentation driven by leading giants, unhindered by international influence.”

Chinese consumers’ propensity toward digital adoption is also seen as a key driver behind the country’s fintech boom, featuring a disproportionately large presence of tech-savvy millennials who are open to new technologies.

“China’s unique mix of rapid urbanisation, massive and underserved market, e-commerce growth, explosion in online and mobile phone penetration, and customer adoption willingness have created a fertile ground for innovation in commerce, banking and financial services more broadly,” concluded EY Asia-Pacific Fintech Leader James Lloyd.

The report notes that 40% of Chinese consumers use new payments methods compared with 4% in Singapore, while 35% use non-bank fintech firms to access insurance products compared with 1%-2% in many Southeast Asian markets. There are also significantly higher rates of fintech participation in wealth management and lending.