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Trust Amazon, Google with their savings? Consumers are split

If Amazon, Google, Facebook and Apple were banks, would consumers trust them their money?

Two separate studies released this month attempted to answer that question, and what they found was that most consumers would still prefer to stash their savings in traditional banks.

Careful savers — those who set aside money each month and check their balances often — largely prefer to keep their money in banks that have branches. Only 4% said they’d be willing to open accounts with a tech company, according to a survey released Friday by the Consumer Bankers Association and Novantas, a financial services industry consulting firm.

The CBA and Novantas study found that nearly eight in 10 consumers who identify as bank-detached — defined as savers who are highly comfortable with online-only banks — said they would consider keeping a savings account with Amazon, Google or Facebook.

That’s noteworthy because, if the torrid deposit growth at online-only banks is any indication, consumers are becoming increasingly comfortable using banks that do not have physical locations. At two of the largest online-only banks, Ally Bank and Synchrony, deposits have been growing at a clip of better than 20% a year since 2014, according to data from the Federal Deposit Insurance Corp. The industry average over that same time frame is 4.4%.

Of course, the issue is largely academic because the tech firms do not have bank charters and couldn’t accept deposits without them.

Still, the CBA and Novantas said in their report that banks should be paying close attention to customers’ saving — and spending — habits and cultivate those who seem most likely to move accounts to online-only or nontraditional financial firms.

“Banks that identify these traits can target the consumers accordingly, developing products and features for different needs,” the report said.

Read the article at American Banker.

For more information, contact Novantas Marketing

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