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Millennials trust tech firms more than banks

There's a new report suggesting that banks need to seriously consider innovating, if they don't want to hand over their business to tech companies.

The report, entitled 'Are Banks Losing The Innovation Game?', was released by financial regulatory framework compliance experts, Neopay. It is based on a poll of 2,000 UK adults on their experience with high street banks and tech companies.

Here's the deal: the younger audience would rather trust a tech company with their e-money than a bank. Now, knowing that eCommerce is rising fast, it's time for banks to start reacting, even faster.

Almost half (41 per cent) of 25-34 year-olds wouldn't trust a bank with e-money transactions, the report says. The older the audience, the bigger the trust. When it comes to tech companies, the metric is reversed. The younger ones (18 – 24 year-olds) would trust a tech company with e-money transactions in 32 per cent of cases, dropping down to 17.5 per cent among the older generation.

“Traditionally, banks have been synonymous with dependability and solidity. However, since the banking crisis, the sturdiness of banks has been cast into doubt,” says Scott Dawson, commercial director at Neopay.

“Also, the increasing frequency of scandals, combined with concerns about infrastructure and reliability, and the increase of automated processes have all served to erode trust and undermine the reputation of our banks.”

“At the same time, we’ve seen the emergence of new technology companies that are rich with our personal data and are seen to be fuelling much of the innovation and growth across the wider economy.

“Young people still trust banks, just to a much lesser extent than in previous generations. Other providers of financial services, such as apple pay or pre-paid cards are now very much seen as credible alternatives.”

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