LOMBARD, Ill.–American consumers are sharing their thoughts on what they believe the financial industry landscape will look like five years from now, as well as who they believe will be affecting that landscape.
While nearly half of all U.S. consumers believe nontraditional providers will drive innovation in the financial services industry, only 38% said they would consider a nontraditional provider for future financial services needs, according to a survey from Raddon Financial Group, a provider of financial industry research and trends data. However, likelihood to use a nontraditional provider such as PayPal, Amazon, Apple or Google broke down sharply along generational lines, with younger consumers much more likely to consider doing so.
"U.S. consumers continue to trust that banks and credit unions will provide them with the highest quality and most secure financial services available, and they believe that the emergence of nontraditional financial service providers has the potential to drive innovation in the industry," said Bill Handel, vice president of research, Raddon Financial Group. "Innovation is essential if banks and credit unions want to remain at the center of consumer’s financial lives, as younger consumers have no qualms about going elsewhere if their demand for digital and mobile financial services are not being met."
The Raddon Financial Group consumer survey was conducted in February 2015 and explores attitudes among four generations towards traditional and nontraditional providers. The research defined those age groups this way:
- Traditionalists - born between 1922-1945
- Boomers - born between 1946-1964
- Generation X - born between 1965-1978
- Millennials - born between 1979-1999
Among the findings:
Nontraditional Providers and the Delivery of Financial Services
When asked which nontraditional providers they are most likely to use, 26% said PayPal, 19% said Amazon, 16% said Apple, and 16% said Google.
Generational Views on Traditional and Nontraditional Providers
Among all consumers, 51% say they will only use a traditional provider. However, there is a considerable divide between older and younger generations on this preference. While only 29% of Traditionalists say they would consider using a nontraditional provider for future financial services needs, 41% of Baby Boomers, 62% of Generation Xers, and 66 %of Millennials are open to the idea.
Perceived Impact of Mobile Payments
Optimism about the growth of mobile payments also broke down along generational lines. Twenty percent of consumers expect mobile payments to become a major source of in-store payments in five years; 10% of Traditionalists, 19% of Baby Boomers, 17% of Generation Xers and 32% of Millennials agree.