In the days of yore, banks and their customers formed long-term relationships, aided by small communities and the trust offered from proximity and familiarity. Bankers knew their customers by name, and vouched for them when they needed to re-finance a house or get a car loan.
We’ve long since moved away from that model and the relationship we have with our bank is now measured by the convenience, access and choices they give us with our money.
YOUR PARENT’S BANK
THE FUTURE HAS ARRIVED
But are we happy with our banks today? Research, surveys and polls undertaken by various firms have discovered serious cracks in the U.S. banking façade. Edelman PR firm reports 40% of Americans lack confidence in traditional banks, while tech giant Cisco finds a full 1/3 of respondents have more trust in PayPal and similar Web services than they do in their banks. These findings cut across ages, earning levels and geography.
Gen-Y subcultures, too, are affected.
These findings show just how prepared people are for less brick and mortar, and more cyberspace in their banking relationships. But it’s another survey that has forward-thinking entrepreneurs excited: famed Forrester Research indicates an astonishing 80% of families, headed by Generation-Y members, intend to handle banking chores online.
GEN-Y’ERS ARE DRIVING THE FUTURE OF BANKING
Future ATMs will be cool, but used less as we decrease our use of cash.
From 2008 to 2009, the percentage of people under 55 preferring online banking rose from 25% to 36%, according to American Bankers Association. Even among consumers over 55, online banking is in second place at 20%, as only slightly more seniors (33%) prefer visiting a branch office.
U.S. and European research indicates that this generation, with its high level of tech-savviness, will shape the future of banking. That future means online, flexible account management, multiple ways of connecting, 24-hour service, and customized banking “apps” and services. Fueled by the massive push of smart phone popularity, mobile banking is set to take off.
Citigroup has already proven, with its exciting Tap & Go stickers, that it is ready to be a fierce competitor in online banking. Anywhere that offers a PayPass reader can accept a payment of up to $50 from MasterCard customers, via a simple tap from the sticker appliqué. This “cell phone wallet” makes purchasing an effortless motion.
These are the teller windows of the future
Your expense report will be ready in an hour
A Wisconsin technology firm, Fiserv, did its own research on the future of banking and found that almost half of Gen-Y consumers interviewed signaled their desire to connect as easily to their banks (and their money) as they do to friends and acquaintances on Facebook and other social media sites.
In New York, London, Moscow, and Tokyo, today’s young people take high-tech for granted
Larger than even the Baby Boomer generation, with greater (and growing) economic power, Gen-Y is a critical component of any bank’s future. In the future, expect financial service firms to solidify their presence in social media, and use those tools to do precisely what they’re made to do – build relationships. The banking revolution has just begun, so what innovation are you most looking forward to?