Survey Finds that More Than Half of Consumers Would Prefer Fintechs over Traditional Banks
Ondot Systems, a California-based fintech company, recently released findings from a Harris Poll survey indicating that consumers are increasingly willing to try fintech companies over traditional banks and credit unions. As banks continue to collaborate with fintech firms, it remains unclear how banks’ branding could affect how successful the relationship becomes.
Though the survey shows that most American consumers prefer fintechs, it also found that 69 percent of consumers think these companies are more likely to experience a data breach. Still, many who are willing to look past their precautions and bank with tech companies could put traditional firms at risk.
Vaduvur Bharghavan, CEO of Ondot Systems, told Banking dive that these traditional institutions, “particularly community banks and credit unions, need to be empowered to offer an Apple-card-like solution, not just payment cards but digital cards. There is a certain notion of trust and personal connection with community institutions. The challenge is you have to make a choice today.”
Fintechs and smaller, traditional institutions rely on each other. Fintechs need traditional banks for security and distribution channels, while traditional banks may not last if they don’t partner with tech firms. Small banks often don’t have the means to develop their own technology, and fintechs need to strengthen security to establish and maintain public trust.
“For a variety of reasons, both for the need for communities to have these local financial institutions because of all the jobs and the social aspects therein, we believe that banks and credit unions really need to try, and the biggest impediment for them is how to get the technology delivered easily,” Bharghavan said.