FinTech

Americans Warming to FinTech Disruption

For nearly a decade now the FinTech sector has helped change the way Americans get loans, pay for items online, and invest their money. In that time companies in the space have been met with both skepticism and excitement from those in the know. But what do average consumers in the U.S. think about financial technology companies and their disruption of the banking industry — or do they even really know about it?

According to a new study by Blumberg Technology and reported on by MarketingCharts, the majority of Americans now hold positive views of the FinTech sector. In fact nearly 70% said they either actively sought new financial technologies or were at least open to them. Meanwhile only 24% were dead set against the idea and another 7% didn’t know what to make of the growing field.

Nearly half (49%) of all respondents said that, while they were interested in what FinTech companies could offer, they would still want to keep some of their traditional banking services. However one-fifth of those surveyed claimed to be early adopters who always wanted to be on the cutting edge of financial technologies that would make their lives easier. Interestingly that figure skewed even higher among older Millennials and Gen Xers as 32% of those ages 30 to 39 said they early adopters of the latest financial solutions. Also outpacing the overall average were 18 to 29-year-olds at 27%. Understandably only 8% of those over 55 years old said the same.

Traditional Financial Institutions an Endangered Species?

The Blumberg study also asked more specific questions about how average Americans felt about FinTech. For example the survey discovered that 69% of people think FinTech solutions will help everyone to be better off financially. Similarly 65% said that new technologies helped level the playing field by making tools previously only available to the very wealthy more accessible. Perhaps the most surprising revelation to come out of the study was that 57% of respondents expect traditional banks to disappear within their lifetime.

There are several reasons why the participants of this study admire the new financial technologies that startups are bringing to the world, although they do still have some concerns. Nearly three-quarters of those surveyed said they’d want more automation and customization available to ensure they wouldn’t miss a loan payment and could strategically help them to keep the interest they pay to a minimum. Speaking of interest rates 62% said they thought they were paying too much in interest on their debt (the study didn’t specify what kind of debt). However, as has become a recurring theme, 72% of respondents said they do worry about the security of online banking services and other such technologies. Additionally 65% said that security was their main priority when it comes to choosing a financial institution.

While the FinTech sector as a whole still has a lot of growing to do before it can really be considered mainstream, this survey is a huge step in the right direction. Although the majority of Americans still have their concerns about security when it comes to their finances, FinTech companies are well aware of this fact. They will surely do everything they can to reassure potential customers that they’re not only on par with the big banks regarding security but superior to them in many other ares. In the meantime this study once again gives traditional institutions incentive to work towards partnerships with disruptive startups and improve the world of financial services for everyone.

Other Articles by Jonathan Dyer