BROOKFIELD, Wis.–A substantial number of consumers have become comfortable using nonfinancial providers for essential activities such as paying bills, transferring money to others, and taking out loans—but those providers still trail traditional financials.
In addition, the latest Expectations & Experiences consumer trends survey from Fiserv, Inc. also found notable adoption of voice-activated technology, with half of consumers using a voice-activated device feature within the past year, and over a quarter of those using it for a banking function within the past 30 days.
Among the findings:
- When it comes to bill payment, 88% of consumers are comfortable paying bills through a bank or credit union, 52% through a payments company, 40% through a technology company, and 16% through a social company.
- For taking out a loan, 82% are comfortable doing so with a bank or credit union, 32% with a payments company, 29% with a technology company, and 14% with a social company.
- Results are similar for other financial activities, including managing money, tracking budgets, and transferring money to others, with consumers indicating the highest levels of comfort with financial institutions, followed by payments and technology companies, and trailed considerably by social media companies, Fiserv said. “These relatively consistent levels of comfort may reflect consumers’ perceptions about the ability of these organizations to secure financial information and transactions.”
- Nearly two-thirds (65%) of Millennials are comfortable managing their finances through a payments company, compared to 26% of non-Millennials. In addition, 63% of Millennials are comfortable managing their finances through a technology company, compared to 24% of non-Millennials. Millennials are nearly five times as likely as other generations to be comfortable managing finances using a social company, at 34% for Millennials and 7% for non-Millennials.
- Despite their comfort with nontraditional providers, Millennials are maintaining relationships with traditional financial institutions, with 90% reporting they have a national bank, credit union, community bank, or regional provider as their primary financial institution, Fiserv said.
- For some, voice banking has arrived, with half of all consumers reporting they used a voice-activated device feature in the past year. Among them, 70% used the feature to search for information, 56% to ask directions, and 26% to perform a banking function within the past 30 days.
- When asked specifically about accessing voice banking via their financial institution, Fiserv said 15% of consumers expressed interest, including 33% of Millennials. Interested consumers said they would like to check account balances (68%), pay a bill (46%), and transfer money between accounts (38%) through a voice-activated device.
“Technology and payments companies may give banks and credit unions a run for the money as consumers become comfortable using these companies for financial activities, an undeniable signal for financial institutions to take note,” said Mark Ernst, chief operating officer, Fiserv. “It’s critical that financial institutions think of themselves as technology providers in order to capture the opportunity to expand upon existing customer relationships and meet the demand for fast, convenient solutions that make people’s lives easier. The best and most convenient options will be the ones that win out.”
A paper detailing the results and research methodology of Expectations & Experiences: Channels and New Entrants, highlighting the impact of consumer technology adoption on financial behavior and the many implications for financial services delivery, is available at https://fisv.co/channels17.