Three quarters of Americans would ditch traditional banks for fintechs
A new survey shows that 74 percent of Americans would be willing to switch from their bank to safe and more cost-effective fintech services. The same research also finds that half believe their bank fees are too high, while one in five thinks banks are slow innovators.
The survey of over 1,100 people by the Money Transfer Comparison website finds 39 percent of Americans would switch for innovative low-rate credit cards, 35 percent for personal or car loans, 30 percent for home loans, 25 percent for savings accounts, 22 percent for budgeting apps, 15 percent for share trading and 13 percent for international money transfers.
Higher income earners are most likely to be open to outsourcing their financial services to more cost-effective digital services, with 78 percent of $100,000+ income earners saying they'd be willing to use fintech services, followed by 77 percent of $50,000-$100,000 income earners and 69 percent of under $50,000 income earners.
There are geographical variations too, Western states are most likely to outsource their financial services to low-cost digital service providers (77 percent). This compares with 75 percent of those in Southern states, 74 percent of Midwest residents and 67 percent of Northeast residents.
Alon Rajic, founder and managing director of Money Transfer Comparison, says, "It is encouraging to learn that Americans are willing to branch out from traditional banking services to digital service providers when they offer better value. The movement of customers from big banks to smaller fintech services will also motivate banks to keep up more efficiently with innovation and competitive pricing."
As the fintech industry continues to evolve, 19 percent of respondents believe that traditional banks have not been able to keep up. Millennials and Generation X are the least impressed with the ability of banks to innovate, with 22 percent of this group saying banks haven't kept up, followed by 15 percent of baby boomers and 11 percent of Generation Z.
"Many consumers who are not satisfied with the banking fees they incur may remain loyal to their bank if they don't do the research to find more cost-effective money transfer services, lines of credit and trading platforms," adds Alon. "I encourage Americans to do their research, including through comparison websites, to find the best-value financial service providers to ensure they are always getting the best deal."
You can get the full report from the Money Transfer Comparison site.