Sixty-four percent of American adults would consider buying or applying for financial products from technology companies like Apple and Google instead of a bank or credit union, according to a Harris Poll survey due out Wednesday.
They would be willing to do so — despite some reservations about the companies' information-sharing practices — if the products were more convenient to use, good at helping users stay on top of budgeting and spending, and more high-tech, the survey found.
The mobile wallet technology company Ondot Systems commissioned the Harris Poll survey of 2,010 adults in late January to determine Americans’ attitudes toward technology companies like Apple, Google, Amazon and Facebook providing financial services.
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In this study, older Americans seemed willing to switch to a tech company. Among those 18 to 34 years old, 81% would consider purchasing or applying for financial products from a tech company instead of a traditional financial services provider, and 79% of Americans who are 35 to 44 feel the same. Even in the 55-to-64 segment, 52% said they would go with a tech company.
“The first striking point is that people under 55 seem to be in the majority who are open” to switching to a tech provider, said Vaduvur Bharghavan, CEO of Ondot. "It is one thing to say younger Americans are more likely to be more open to digital and big tech — of course they would be. The bigger story is that it is transcending traditionally accepted norms of age groups. It is not only young Americans who are open.”
Six out of 10 people surveyed say they are willing to let tech companies use their spending data to get some kind of value in return, such as better security, protection against fraud or rewards.
But the survey respondents also seem to trust tech companies less than banks with their data: 74% agree that tech companies are more likely to sell personal financial data than traditional financial services providers like banks and credit unions; 75% agree technology companies are not transparent about how they use people’s personal information; and 69% agree tech companies are more likely to have a data breach than traditional financial services providers.
Bharghavan said the perception that banks are safer than tech companies is perhaps partly due to the fact that banks already have customers’ financial data. Moreover, companies like Google and Apple could add transaction information to the trove of data they already have about consumers’ locations, the websites they visit and other daily activities.
“I think the concerns are legitimate from just the totality of the information that is available,” he said.
Whether the tech companies would misuse that data is a matter of debate.
“All of the tech companies are going to say this is totally anonymous, and they’re not going to share the information outside,” Bharghavan said. “Having said that, it’s almost inconceivable that it would not be shared for their primary business.”
About 72% of respondents said that the tech giants coming into financial services threaten the existence of traditional banks, small community banks.
“Clearly, incumbents need to react,” Bharghavan said.
