Reach3 Insights’ research on future of Financial Services industry shows nearly half of these harder-to-reach audiences expect cash no longer to be used in five years, banks to disappear in 10
Financial well-being is second in importance only to health for younger consumers, DE&I audiences and those who use alternative financial services. The finding is from The Future of Financial Services: A DE&I “Harder-to-Reach” Audience Perspective report, conducted by Reach3 Insights using a conversational, mobile, chat-based platform from Rival Technologies. Additionally, the research showed that among this group, a significant percentage believe cash will no longer be used in five years and that traditional banks will disappear in the next 10 years.
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“Diversity, Equity and Inclusion is a watchword across Corporate America. Companies are working to implement strategies that not only foster acceptance and tolerance, create trust and improve morale within their organizations, but also help improve their bottom line,” says Siddharth Gopinath, SVP of Financial Services at Reach3 Insights.
The research was conducted in April of this year among 945 adults 18 plus, with a particular focus on DE&I audiences’ engagement with financial services in order to shed light on how a variety of harder-to-reach audiences, including African American, Hispanic, Asian American, the unbanked/underbanked, LGBTQ+, Gen Z and Millennials view the Future of Financial Services.
“DE&I audiences and those who are traditionally harder-to-reach for financial services providers, expect big changes in the future of financial services, such as the use of more digital tools and crypto accompanied by less in-person interactions,” continued Gopinath. “As a result, the future of retail needs to be re-imagined to stay relevant. Many new products that represent the future of financial services will rely on these audiences for growth, making the need to engage with them of critical importance to the industry.”
The study found that among those who cite financial well-being as a top priority, 30% expect their financial situation to be better this year, with 51% of those who are “under-banked,” that is who use alternative financial services, saying so, as well as 44% of GenZ consumers, 44% of LGBTQ+ consumers, 43% of Hispanics and 39% of Millennials.
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27% of those who say financial well-being is a top priority expect to save more, with 43% of those “underbanked”, 42% of Gen Z and 42% of LGBTQ+ consumers agreeing.
Across different types of Financial Institutions, Payment Providers and Banks stand out relative to Insurance, Investment Management, and Fintech on relatability, trustworthiness and innovation. Looking specifically at relatability, 66% of harder-to-reach audiences name Payment Providers as being most relatable, followed by Banks at 62%, Fintech at 30%, Investment Management at 28% and Insurance at 20%.
54% of all consumers expect to interact less with real people for financial transactions and use more digital tools within the next five years, but that number climbs to 62% among those “underbanked” and 70% of Asian Americans, compared to just 43% of Baby Boomers who say so. Harder-to-reach audiences are a key growth driver for both established as well as new financial services products. For example, 44% say they would be likely to use digital banking in the future, driven by LGBTQ+ (67%) and Gen Z (62%). With investment apps, 34% are likely to use them in the future, driven by Millennials (48%) and Hispanics (47%).
30% of those responding expect traditional banks to disappear in the next 10 years, with 36% of Millennials, 40% of LGBTQ+, 43% of Gen Z and 51% of those “underbanked” agreeing.
Additional findings from the research include:
- While harder-to-reach audiences may expect to see a decline in traditional banking, they believe cash will still be king; 32% of consumers believe cash will no longer be used in 5 years, however, that percentage climbs to 43% of GenZ, 46% of LGBTQ+ and 46% of those “underbanked”;
- 22% anticipate using crypto currency for many financial transactions within five years, with 32% of Hispanics, 32% of Millennials, 37% of LGBTQ+, 41% of Gen Z and 51% of those “underbanked” agreeing and only 6% of Boomers saying so;
- While just 44% of all respondents say they anticipate using digital banking in the future, 67% of LGBTQ+, 64% of “underbanked,” 62% of Gen Z and 59% of Millennials expect to;
- 39% of consumers say they will use contactless payment options in the future, with a much greater percentage of those “underbanked” (59%), Gen Z (55%) and Millennials (50%) expecting to;
- Similarly, while only 34% of consumers expect to use investment apps in the future, 59% of those “underbanked,” 47% of Hispanics and 48% of Millennials say they will;
- Overall, 59% of consumers believe socially responsible insurance will be more important in the next five year, with 67% of African Americans and 69% of Hispanics saying so. 58% believe socially responsible investing will be more important.
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