As if we needed further proof that traditional banks are going the way of the dinosaurs, Accenture has recently released findings that show that younger bank customers are twice as likely as older customers to switch to a branchless bank or even to a non-traditional player offering banking services.
Gone are the days of receiving a toaster when you opened a new bank account; today’s consumers want all of the services but none of the hassle of walking into a branch, standing in line and talking to an actual teller. Instead, according to Accenture, people are more open than ever to alternative ways of doing their banking.
In addition to results that show 39 percent of customers 18-34, 29 percent of those 35-55 and 16 percent of those over 55 would think about going branchless, the survey goes much further to show that a large number of people – mostly in the younger age range – are open to doing their banking with tech companies like Amazon, Apple and Google if they ever choose to offer financial services.
Considering that millennials have spent most of their lives in the digital world, these numbers shouldn’t surprise anyone and should actually give those companies food for thought. They are already privy to a vast amount of personal customer information, so the leap to the world of finance should not be a huge stretch, regulatory issues aside.
Another bit of data from the survey is that a very high percentage of respondents (as high as 72 percent of 18-24 year olds), would be willing to bank with at least one technology, telecom, retail or postal/shipping firm.
This should be a giant kick in the pants for the telco community, which is already in the perfect position to add banking to its list of services in an effort to bring in new revenue. In fact, Rogers Communications, the largest CSP in Canada, announced last fall that it would begin offering credit card services in 2014, both in a traditional plastic format as well as a mobile version. This news came after the telco received the blessing of Canada’s banking regulator, a hurdle that took a lot of effort and money to clear.
Given that Rogers had previously partnered with Canadian banking institution CIBC and has teamed up with other companies on mobile payments, it will be interesting to see what happens to those alliances once the telco in essence becomes a bank itself.
And Rogers is far from alone. From African operators delivering sophisticated mobile payments capabilities for the so-called “unbanked” to Square’s and PayPal’s mobile wallets, various tech and telco players are getting into the money mix. With banking deregulation happening faster outside of North America, it’s a bit easier for European telcos and others to join the game, including Telefónica and Telenor Serbia.
For their part, banks are reacting to the current and potential competition, including through improving their personal engagement with customers as pointed out in a recent post here by Jonathan Jensen. But will it be enough?
With customer loyalty more fleeting than ever before, even a stalwart institution like a bank no longer holds the monopoly on money.