Younger consumers will likely have no worries about walking away from banks or credit unions and using a nontraditional financial services provider in the near future, according to new research from the Raddon Financial Group.
The survey of U.S. consumers by Raddon, a provider of financial industry research and trends data, offers a glimpse into future of the financial services industry.
Almost half of consumers surveyed (49 percent) believe that nontraditional financial services providers, such as PayPal, Amazon, Apple or Google, will drive innovation in the industry. However, only 38 percent said they would consider a nontraditional provider for future needs.
The desire to embrace a nontraditional provider is skewed by the age of the respondents. For its survey, Raddon labeled respondents as either Traditionalists (born between 1922 and 1945), Boomers (born between 1946 and 1964), Generation X (born between 1965 and 1978), and Millennials (born between 1979 and 1999.
Only 29 percent of Traditionalists said they would consider a nontraditional provider for future financial services needs. But 41 percent of Boomers, 62 percent of Generation X-ers and 66 percent of Millennials said they are open to the idea of using nontraditional providers for financial services.
“U.S. consumers continue to trust that banks and credit unions will provide them with the highest quality and most secure financial services available, and they believe that the emergence of nontraditional financial service providers has the potential to drive innovation in the industry,” said Bill Handel, vice president of research, Raddon Financial Group. “Innovation is essential if banks and credit unions want to remain at the center of consumer’s financial lives, as younger consumers have no qualms about going elsewhere if their demand for digital and mobile financial services are not being met.”
Other key highlights from the survey include:
- 32 percent of Millennials and 20 percent of all consumers believe mobile payments will be a primary method of in-store payments within 5 years
- Which nontraditional providers will consumers most likely use? Here’s how respondents broke it down:
– PayPal 26 percent
– Amazon 19 percent
– Apple 16 percent
– Google 16 percent