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Banks aren't keeping up with trends

News, 20 October 2016

SAN FRANCISCO: A majority (57%) of American consumers believe that financial institutions as we currently know them will cease to exist within their lifetimes, a new survey has revealed.

But that doesn't mean consumers expect the banking system to end because nearly 70% believe financial technology (fintech) solutions will take their place.

That's according to an online survey of 2,036 US adults by Regina Corso Consulting on behalf of Blumberg Capital, a venture capital firm based in California, which exposed high levels of consumer dissatisfaction with current banking services.

According to the findings, respondents overwhelmingly (80%) believe that traditional financial institutions should focus more on the average consumer and small businesses.

They want access to flexible borrowing options (79%), believe they are charged too much interest on debt (62%) and say the financially under-served need access to better loan and credit options (76%).

While fintech is still in its infancy, the survey suggested that Americans are increasingly willing to embrace the new technology for the convenience it offers.

According to Blumberg Capital, 70% of Americans believe that new solutions – such as digital banking, online lending, payments and financial services – are making financial transactions easier than ever.

Almost two-thirds (65%) also say that fintech helps to level the playing field by providing access to services previously available only to the wealthy, and 69% say the latest fintech tools will help everyone to be better off financially.

"Between the negative headlines and Americans' general distrust of large financial institutions, banking as we know it must and will change," said David Blumberg, Founder and Managing Partner of Blumberg Capital.

"While no one knows what will happen in the banking business over the next 20 years, it's clear that more Americans are increasingly dissatisfied and are excited to embrace new technologies."

Data sourced from Blumberg Capital; additional content by Warc staff