FinTech firms may not be the only ones that traditional financial institutions (FIs) need to keep an eye on. About six in 10 consumers have said they would be open to banking with non-FIs if they could — especially with big-name brands like Amazon, PayPal and Walmart.
Younger consumers, as it turns out, are particularly open to receiving financial services from retail merchants and FinTech firms. As much as 48 percent of consumers between the ages of 30 and 40 said they would be interested in using banking services offered by PayPal, while 35 percent said they would be interested in using those offered by Amazon.
The question is: Why do consumers feel comfortable enough to consider using banking services from some brands more than others?
In the Where Will We Bank Next? survey, a Green Dot collaboration, PYMNTS surveyed more than 2,500 American consumers to get to the bottom of why consumers are open to using financial products offered by FinTech firms and retailers. According to the research, consumers’ interest in banking with some of their favorite retailers appears to stem from the same factor that influences why they bank with traditional FIs.
Trust, the findings indicated, is why 91 percent of consumers feel that their primary FIs fit their personal financial needs. Trust is also one of the key factors for the 57 percent of consumers who are willing to bank with non-FIs.
Consumers’ interest in using financial products offered by non-FIs stems from the fact that their banks are falling short of their expectations, prompting some to be more willing to switch their primary FIs. Among the approximate 9 percent of consumers who said their FIs are not a good fit for their needs, about 22 percent said it’s because they have to pay to use ATMs, for instance, or because their banks have inconvenient branch locations.
For these reasons and more, a surprisingly large portion of American consumers might be willing to try banking with their favorite retailers — if only they had the choice. To learn more about the role of trust in brand loyalty and banking, download the report.