Millennials say “hasta la vista” to banks and “hola” to mobile banking alternatives.
Traditional banks have existed for hundreds of years – the oldest being Banca Monte dei Paschi di Siena, Siena, Italy, founded in 1472: okay, okay, just had to add that little fact, because frankly we didn’t know how exactly long banks have been around, and were quite surprised it was in fact, this long.
Over the ensuing years, banks (and their shareholders) enjoyed the benefits of being in a relatively protected market niche, with few legitimate alternatives to invest savings and obtain loans. Thus consumers became accustomed to the fact that whenever they needed to make a deposit or withdrawal, required a loan or mortgage, or invest savings, it involved a trip to the bank. (Now, not so much. We’re getting to that. Happy times.)
Along came the ATM, with the first being installed in 1967 at Barclay’s Bank in London (no fee to use it either), and in the ’70’s use of ATM’s became mainstream. That took care of having to visit a bank to get cash or deposit. As much as the number of physical visits were reduced, banks were still very much involved in our day to day banking and earning fees from our business in one way or another. Of course, we no longer like carrying cash, so we pay fees for credit cards and debit card transactions, in addition to other fees and loans. Consumers, especially Millennials, are looking to change all that.
Flash forward to today, and when it comes to banking choices, things have come a long way baby. Technological advances and increased security, online investing options, online and mobile mortgage brokers to name a few, combined with an evolutionary (or should we say ‘revolutionary’) change in perception when it comes to traditional banks, is driving more and more business elsewhere.
Time is a luxury and convenience a necessity, thus consumers, especially Millennials, have moved on to transacting with their mobile devices. With internet players like Facebook, Amazon, Google and Paypal offering banking alternatives for a variety of services, the playing field is rapidly expanding.
Cash transactions are seldom heard of these days and the way things are heading, debit and credit cards too are on their way out, albeit at a slower rate. Technologies like Square allow users to make payments through their mobile phones, and transforming the smartphone into a point of sale device.
According to a study done by Viacom unit, Scratch, around one-third of young Millennials think they will be able to live without banks in the future. Further, they say that 71% of Millennials would rather visit their dentist than hear what their banker has to offer – yet a whopping 73% would welcome offers from modern internet players like Apple, Amazon, Google, Square or PayPal.
The online industry is reciprocating this trust and popularity. PayPal and Apple are already working on Fingerprint Integration, Amazon has acquired Go Pago to broaden its financial horizon, and Gmail and Google Wallet are now in sync – all signs of a financial revolution.
Virtual banking is more than here to stay.