A major shift in UK banking behaviour can be expected over the next five years, according to a report, The future of finance: how technology is democratising the financial services sector, launched today by TransferWise.
People are ready and willing to consider financial technology alternatives to their bank. 65% of UK adults already say that they would consider using technology providers for services that they usually use their bank for today.
Three-quarters (73%) of the UK had never used a technology provider for any financial service. In five years’ time, 4 in 10 (40%) of UK consumers expect to use a technology provider for at least one service their bank would usually provide. Over a quarter (26%) expect to use a technology provider for 50% or more of their financial needs.
In ten years’ time, 1 in 5 UK consumers anticipate they will trust technology providers for all their financial needs from credit cards to mortgages.
The report surveyed more than 9000 adults from across Europe, North America and Asia Pacific including UK, France, Germany, the US and Australia. TransferWise also surveyed its own customer base to compare the attitudes of early technology adopters to general consumers. 20% of UK based early adopters say they’re already using tech companies for 50% or more of their financial needs. A further 61% say they will be by 2020.
Taavet Hinrikus, CEO and co-founder, TransferWise said: “The world of finance is about to change – for good and for the better. In five years’ time, the financial services sector will look completely different with a host of new providers and innovative new services. In ten years, it will be transformed. The main shift will be in our expectations and behaviour as consumers. Most of us are now happy to use alternatives to banks for more and more of our financial needs.
“In five years’ time, some parts of the sector will be almost universally controlled by non-banks; other parts will be a mix. The most important result will be the true democratisation of finance. The nature of the current “bundled” model of banking is fundamentally unfair. But this is changing – and the consumer will benefit.”
On average a fifth of UK consumers think they will use a technology provider for ‘day-to day’ services such as current and savings accounts, credit cards and in-store payments in five years. The ‘bigger’ financial decisions, for instance mortgages, will see a slower speed of uptake.