Millennials Would Prefer to Bank with Google or Amazon: Survey
The momentum that Amazon, Facebook, Apple and Google have in integrating social media with payments is "a huge threat" to banks, maintains Javelin analyst Mary Monahan.
Short-term disruption of the financial services industry will most likely come from within: when banks partner with financial services entrepreneurs and embrace innovation. It's happened repeatedly in the payments sector: PayPal and Wells Fargo ten years ago, Square and JP Morgan Chase Paymentech today.
Banks had better watch their backs.
The rising generation of young Americans not only have little loyalty to banks, according to a three-year survey of 10,000 people born between 1981 and 2000 many also believe that traditional financial institutions are on their way to irrelevance.
Over half (53%) of millennials say that nothing sets their personal bank apart from its competitors, according to the survey by Scratch, a brand consultancy division of Viacom. One in three said that they would consider switching to a new bank within the next 90 days. And the nation's four-largest banks JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (NYSE:C) are among the 10 least-loved brands in the survey, which asked respondents for their impressions of 73 companies in 15 industries.
Young people may be adopting a blasé attitude toward banks because they believe the current financial system is on the way out. Roughly half of respondents said that they are "counting on tech start-ups to overhaul the way banks work," according to the survey. Sixty-eight percent said that the way people access money will be completely different within five years, while 70% said that the way people make purchases will change drastically within that time frame.
Given these technological changes, 33% of respondents predicted that they won't need a bank at all in the future. An overwhelming majority (73%) report that they would be more excited about new financial services options from Google, Amazon, Apple, PayPal or Square than from their own nationwide bank.