Consumers’ trust is in place.
Now it’s up to the traditional banks and the digital-only players — FinTechs and neobanks — to meet in the “middle,” leveraging their respective strengths to forge financial services’ super apps.
That’s an aspirational goal, of course.
Right now, the competition between banks and FinTechs is one where they are cribbing attributes from one another to capture market share. In a nutshell, banks are in the midst of improving their digital access — evident in any number of new apps and mobile launches. JPMorgan Chase, for example, has been boosting its digital presence in the U.K.
FinTechs are expanding their reach into traditional banking, where we’ve seen LendingClub buy Radius.
Read here: FinTechs Adding Brick-and-Mortar Banks Becomes Global Trend
And so, at this writing, with only a quarter of 2022 under our collective belts, we see the competition being waged fiercely. JPMorgan CEO Jamie Dimon’s letter to shareholders highlighted the issue, as detailed in this space:
“The growing competition to banks from each other, shadow banks, FinTechs and large technology companies is intensifying and clearly contributing to the diminishing role of banks and public companies in the United States and the global financial system,” Dimon wrote.
The recent PYMNTS/Entersekt report, “The Future Of Authentication In Financial Services: Engaging Consumers Across Channels And Devices,” done in conjunction with Entersekt, notes consumers are increasingly used to the idea of transacting, saving and investing across the web. As many as 71% of consumers use online accounts to get banking done; 39% of those we surveyed have online accounts with banks, and a bit less than a third have accounts with digital banks or FinTechs.
As for the trust that beckons the way toward that eventual “meeting in the middle” for banks and digital upstarts, almost three quarters of consumers trust commercial banks that have onsite branches, and more than two-thirds trust online banks and FinTechs.
If the trust is there — and it is — then it follows that financial services users will be more inclined to at least sample new products and services on offer, when they are offered. And that opens the door to collaborative efforts by the digital players and the marquee names that have been around for decades (even longer in some cases).
But it will be the conduits that are key to allowing joint provider efforts to more fully reach their targeted audiences — in this case the younger users (bridge millennials and millennials) who want flexibility. More than a third of each of these cohorts want accounts to be available across multiple points of access, and a quarter of all respondents say they like to use multiple methods to access accounts.
For the banks and the FinTechs that bend toward one another, in a spirit of collaboration and a continuum of services, the audience is primed and waiting and willing. PYMNTS’ own research shows that 67% of consumers in the U.S. — which translates to 173 million people — want an app that manages their digital activities, including “financial wellness seekers” that want an app-enabled way to conduct their daily financial lives.
Read also: Are You Among the 173M Americans Who Want a Super App?
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