Customer loyalty ‘keeping big US banks alive’
Written by Anthony Strzalek
The majority of US consumers believe that their financial institutions are not evolving fast enough, but remain loyal for the meantime, new research suggests.
The Blumberg Capital survey, which polled more than 2,000 US adults, found that half of the respondents surveyed said they use traditional financial institutions, while 57 per cent have a positive view of FinTech and want to seek the benefits of new technologies and services.
While 33 per cent of respondents claimed nothing could influence them to leave their bank, 40 per cent would leave for lower interest rates or a higher levels of security.
More than three quarters (76 per cent) believe that financial technology helps consumers gain more power over their finances and 67 per cent would trust new payment or investment technologies more readily if offered by their existing bank.
Yet despite consumer appetite for technology, 53 per cent said they were unfamiliar with blockchain, bitcoin and other cryptocurrencies and 40 per cent think cryptocurrencies are used by criminals or hackers to receive compensation discretely.
On the flip side, 51 per cent believe the latest developments in cryptocurrency will improve the financial industry by making things cheaper and faster for consumers and 35 per cent believe cryptocurrencies are a viable alternative to the traditional system of currency.
David Blumberg, founder and managing partner of Blumberg Capital, said: “Previously in the financial industry, capital, reputational trust and regulations were the only barriers to entry. Technology is changing the game. Large financial institutions need to build or buy innovation to maintain and extend their leadership positions.
“As consumers demand the new technologies, we will see increased adoption or acquisition of FinTech by banks to serve consumers. In addition, the FinTech revolution is expanding the market, thereby positioning some pure play FinTech startups to become large financial institutions of the future.”