In the annual banking report released by Bain on the 18th of November, approximately 75% of those surveyed admitted they would gladly bank with Big Tech companies. Gerard du Toit, a Bain consultant, noted that the figures underlined that Americans were less interested in speaking with other humans, hence the trend towards banking with tech companies. However, the demographic breakdown was more telling about the figures. While the younger demographics were more open to the idea of banking with a tech company, only 32% of respondents 65 and older stated that they would be glad to put their money in the hands of Big Tech.
Essential Insights for the Future of Silicon Valley
The report underscores the intentions of tech companies to start offering personal finance services. Google has already announced that it intends to partner with Citigroup to provide consumers with a checking account. The system is designed to go live as early as next year. Apple is similarly interested in capturing consumer banking, releasing its own Goldman-Sachs-backed credit card partnered with its latest iPhone. Facebook’s delving into cryptocurrency with Libra is shored up by a new payment processing service that the company introduced, usable across all of its related apps, including WhatsApp and Instagram.
Stark Regional Differences
Within the US, with a massively technologically advanced society, it isn’t that surprising to see so many consumers willing to use tech companies as their financial services providers. However, in other areas such as Asia and Latin America, the volume of potential subscribers was even higher. Over 89% of Chinese respondents mentioned that they would bank with a tech company. However, in the European Union, these companies are still judged with suspicion. Less than 29% of respondents in France were willing to allow Big Tech a place in their financial plans. Most tech companies aren’t interested in becoming banks themselves but are content with partnering alongside banks to achieve their goals. Whether they take a more active role in becoming financial operators is unclear.