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02. 05. 2018

Customers trust tech firms more than banks – W.UP Digital Banking Weekly

Half of the customers don’t trust financial institutions, although the situation has been improving, new research has revealed. It may also come as a surprise that Gen Z is very different from Millennials when it comes to saving up, according to another survey.

Customers trust tech firms more than banks

Gen Z tend to save more than Millennials

Unlike their Millennial predecessors, Gen Z consumers are savers: they don’t want to repeat the mistakes made by previous generations, for example, burdening themselves with massive student loans, according to a study by Radon Research Insights.

Many of Gen Z members (67%) already have an account, either in their own name or as a joint account with their parents. They also tend to use only one primary financial institution, and roughly half (47%) have chosen one of the six largest banks as their primary bank.

Why banks must care about user pain points

What banks may see as an insignificant pain point in user experience (UX) design can be experienced as a large-scale problem by the user, said Linda Zaikovska-Daukste, co-founder of design agency UXDA. Such pain points may exist in onboarding, authentication, navigation or in transactions.

She says failure mapping helps identify product usage scenarios or services causing problems, but searching for design errors that irritate users is a constant process. Being in the users’ shoes will be a competitive advantage for banks, but they “are doomed” if they don’t care, she adds.

Half of the customers don’t trust banks

Financial institutions are among the least trusted companies globally, while customers have faith in technology firms the most, according to this year’s Edelman Trust Monitor survey, carried out in 28 countries. Cited by Chris Skinner on his blog, the survey found that 54% of respondents trusted banks, while 74% thought tech companies were trustworthy.

Financial services have been among the least trusted sectors in the past five years. But there is slow improvement: the share of customers who said they have faith in banks gradually increased from 48% in 2014-15 to 51% in 2016 and 54% last year and in 2018.

Fintechs and banks see marriage problems

The vast majority of banks (70%) now view fintechs as enablers and not direct competitors, according to a new survey by ING Bank. But the relationship between the two parties is not without challenges.

Both agree that it can be very difficult for fintechs to connect with relevant people in banks. There is a disagreement over what drive partnerships: fintechs recognize compliance, operational costs and competitive pressures, while the main driver for half of bank respondents is client attraction and retention. Only 10% of fintechs believed this was a main driver for banks.

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