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According to new research by one of the world's top independent financial advising and fintech organizations, more than half of millennials are happily ready to switch to or already have a digital-only bank.
FREMONt, CA: According to new research by one of the world's top independent financial advising and fintech organizations, more than half of millennials are happy to switch to or already have a digital-only bank.
According to the findings of a deVere Group global study of 550+ clients born between 1980 and 1996, 59 percent of those polled have only ever used digital banking services or expect to do so this year. Clients from North America, the United Kingdom, Asia, Africa, the Middle East, East Asia, Australasia, and Latin America are among the responses.
Of the survey findings, Nigel Green, deVere Group CEO and founder, says: "This is more bad news for traditional banks, which seem to have been in a perpetual game of 'catch-up' in recent years amid evolving customer expectations, regulatory requirements and tech advances. The poll's findings are a big deal for old-school banks. Why? Two reasons: first, millennials because they're the fastest-growing cohort of clients; and second, because they are becoming the beneficiaries of the Greatest Transfer of Wealth in history."
According to some calculations, the baby boomers – the wealthiest generation in history – will transmit 68 trillion dollars in wealth to their children and other heirs (millennials) over the next few decades.
Green continues: “Millennials have grown up on technology. They are ‘digital natives’. They’ve been influenced by the enormous surge in tech as they came into adulthood – which came around the same time of the global financial crash that hit in 2008. Against this backdrop, they seemingly became comfortable using fintech to help them access, manage and use their money rather than using a traditional bank.”
Indeed, according to a Facebook white paper entitled "Millennials + money: The unfiltered journey," 92% of millennials distrust banks, and many view them as an unreliable source of information.
“Mobile-first millennials expect easy, immediate access and control of their finances in the palm of their hand. They demand to be able to transfer money and pay bills in one tap or swipe. They want to be able to review their spending habits, be offered guidance, and have real-time access,” says Nigel Green.
“In most cases, ‘too big to fail’ traditional banks are struggling to keep pace with the tech innovations that are now driving shifting customer expectations. Legacy technologies and clunky business models are presenting considerable transformation challenges.”
Clients get attracted by their green credentials as well as the on-the-go convenience, control, and flexibility that digital-only banks offer.