Consumers’ willingness to buy a financial product from established or new technology companies remains high in many countries, especially in Asia and Latin America, though less so in many parts of Europe. In all countries, younger people are even more willing to try banking with tech companies, Bain’s new survey of 131,930 consumers in 22 countries finds.
The use of tech companies’ offerings varies a lot from country to country. Nonetheless, we see risks for incumbent banks everywhere. In emerging markets, many fintechs have seen high adoption rates, including Paytm in India, WeChat Pay and Huabei in China, Nubank in Brazil and DaviPlata in Colombia. In more mature markets, some disrupters are becoming mainstream. For instance, Borrowell’s adoption in Canada has grown to 16% among respondents applying for a personal loan in the past year, and 18% for younger respondents. In Australia, Afterpay’s adoption has reached 18% for all respondents and 31% among younger ones. Furthermore, a long tail of smaller disrupters are rapidly gaining customers.
Survey respondents give many of the fintechs higher loyalty scores than they do the average traditional bank. The situation will get worse for banks unless they significantly improve and digitalize the customer experience, thereby taking out cost to reinvest in better product features and pricing.
Bain’s 2019 global customer loyalty in retail banking report shows why customers increasingly embrace technology firms for banking products.