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Half the world’s 18-34 year-olds would bank with Amazon or Facebook rather than a traditional bank 

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Danny Healy

The last competitive advantage of traditional retail banks – their respect for privacy – is about to be neutralised, according to a new survey of tomorrow’s financial services customers.

A study has uncovered a massive latent demand in young people for banking services from the likes of Amazon, Facebook, Google or Apple.

Despite the abuses of privacy for which these companies have become known, at least half of the 18-34 year olds across the globe would bank with social media companies because of the convenience and personalisation they offer – a quality that traditional banks can’t compete with.

Mulesoft says many consumers feel that their bank provides a disconnected experience. The majority would consider changing their service provider as a result.

The key revelations of the survey were that 34 per cent of global consumers would prefer Amazon and co to a standard bank, while 52 percent of consumers aged 18-34 years old would see the tech giants as viable banking providers.

The youth of Singapore (47 per cent) and the United States (43 per cent) were found to be most open to Facebook and co as banking providers. The Dutch were the least susceptible, with only 22 percent likely to consider them.

Simplicity (42 per cent) and a more personalised service (23 per cent) were cited as global consumers’ most popular reasons for choosing Amazon, Google, Facebook or Apple for banking services.

The most surprising finding, given the revelations about Facebook’s treatment of its user’s private data, is that 61 per cent of 18-34 year-olds would be happy for banks to share their transaction data with third-parties. As long as they get more personalised experience, users are happy to give up their data.

Consumers in Singapore (54 per cent) and the US (49 per cent) were most happy for banks to share their transaction data, whereas those in the UK (35 per cent) and Germany (35 per cent) were least in favour.

The report, “Consumer Connectivity Insights 2018,” was commissioned by Mulesoft and 8,000 consumers were quizzed.

Young people will surrender data privacy for convenience, according to Danny Healy, client architect the office of the CTO, for MuleSoft.

“Regulations forced banks to open up their banking systems through APIs, which in turn is creating a new wave of innovation in financial services,” said Healy. The one competitive advantage of banks – their respect for the privacy of their clients’ data – has been removed. “Traditional banks can’t afford to ignore the demands of the younger generation who expect a seamless experience across digital channels. Traditional banks have really only just scratched the service when it comes to open banking,” said Healy.

 

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