Financial technology (FinTech) is steadily gaining traction in today’s technology-driven market, and according to Blumberg Capital's Annual FinTech Survey, over two-thirds of Americans are looking for banks to provide new fintech solutions.
The survey, released Wednesday, examines attitudes of American consumers toward traditional banking institutions, fintech startups, and new financial technologies, including blockchain and cryptocurrency.
The survey discovered that 57 percent of respondents have a positive view of fintech startups—while 57 percent also believe that the days of going into a physical financial institution for any reason are coming to an end.
According to David Blumberg, Founder and Managing Partner of Blumberg Capital, previously in the financial industry, capital, reputational trust and regulations were the only barriers to entry.
“Technology is changing the game,” Blumberg said. “Large financial institutions need to build or buy innovation to maintain and extend their leadership positions. As consumers demand the new technologies, we will see increased adoption or acquisition of fintech by banks to serve consumers.”
In addition, Blumberg believes the fintech revolution is expanding the market, thereby positioning some pure play fintech startups to become large financial institutions of the future.
However, the survey notes that with major breaches in security at large established financial institutions, like Equifax, Americans are worried of new financial technologies and are skeptical if institutions are trustworthy—76 percent of respondents worry about security with some of the new online banking and payment services. According to the survey, this increased from 72 percent in 2016.
Blumberg continued to explain that while the average consumer may hesitate to change from traditional banking to emerging fintech products and services, the potential benefits might become too valuable to ignore.
"These results indicate that for fintech startups to scale and thrive, they need to provide a product or service that is substantially better, not just incrementally better than traditional banks. At the same time, if banks don't adapt and adopt new technologies they risk losing the next generation of customers," Blumberg said.
To view the full report, click here.