The use of FinTech to conduct personal banking, at least in the United States, could be on the verge of sweeping adoption over the next few years.
That’s among the key findings of a recent report by TransferWise, which helps people send money abroad through P2P platforms. Titled “The Future of Finance,” the report noted that more than half of Americans (a bit more than 1,000 surveyed), at 55 percent, have a positive view of the security of technology, as they see the upstarts as being “more secure or just as secure” as banks.
That’s a telling statistic, as FinTech firms have come to occupy a strong niche within financial services only in the past five years. And clearly security has ever increasingly been top of mind for consumers and firms alike, as top financial firms have paid out as much as $235 billion in the past seven years alone in fines tied to breaches and transgressions of regulations in place both before and after the financial crisis.
Against that backdrop, a slight majority of U.S. respondents to TransferWise’s surveys said they would consider turning to FinTech to fill at least one of their financial service activities. And 28 percent said they expect to use technology (and tech firms) to conduct a majority of their banking activities within five years from now.
Demographics seem to play a role in technology adoption, especially as pertains to the wholesale adoption of tech – and by extension, using FinTech as part of that technology usage. The rise of the millennials has been exhaustively chronicled, but bears mentioning here, as those skewing 34 and younger are relatively more comfortable with technology in general, and especially in mobile settings.
Early adopters, said TransferWise, come within the age range of 25 to 35 years of age, with earnings of about $50,000 to $100,000 annually, and more than 90 percent of respondents here said they would expect to use FinTech for most of their needs by the end of the decade.
Though the growing acceptance of the intersection between tech and finance is notable in itself, TransferWise said the most significant shifts – measured against actual financial products – may be seen in credit cards, where 31 percent of respondents said they expect to use a tech company with this function within five years. FinTech as an alternative gathers momentum as a real choice versus traditional banking when consumers think about security (at 34 percent) or convenience (at 28 percent). And of course, cost rounds out the Top 3, with people likely to make the jump if tech companies offered the same service at a better price point.