A new financial technology, or “fintech,” survey from Blumberg Capital, an early-stage venture capital firm in San Francisco, found big banks can leverage existing customer loyalty to introduce new technologies that will save them money, increase transparency, and make transactions easier. This is particularly true for older Americans and low-income families, who are more wary of new financial technologies.
Consumers remain loyal to big banks despite a majority of Americans believing that they do not evolve fast enough to keep up with their increasing needs and rising expectations, the survey found. “Contrary to the popular belief that big banks and fintech companies are locked in a zero-sum battle, American consumers want the best of both.”
Half of the US population prefers using a traditional financial institution but also wants the benefits of new technologies and services. Also, more than two-thirds would trust new payment or investment technologies more readily if offered by their existing bank, the firm found.
The survey also examined the factors that would influence American consumers to consider switching financial institutions or services. Almost one-third of respondents said nothing could influence them to leave their bank, while nearly half said they would consider leaving for lower fees, and almost 40 percent would leave for lower interest rates or a higher level of security.
“While the average consumer may hesitate to change from traditional banking to emerging fintech products and services, the potential benefits may become too valuable to ignore,” said David Blumberg, founder and managing partner of Blumberg Capital. “These results indicate that for fintech startups to scale and thrive, they need to provide a product or service that is substantially better, not just incrementally better, than traditional banks. At the same time, if banks don’t adapt and adopt new technologies, they risk losing the next generation of customers.”