The companies sometimes known as GAFA (Google, Apple, Facebook and Amazon) hold strong appeal with American Millennials (22-34) as potential banking destinations, according to an Accenture survey [pdf] of 32,715 adults across 18 markets. In fact, half of Gen Y respondents in the US would consider banking with one of these companies.
Moreover, 45% would consider buying insurance from an online service provider such as Google or Amazon, and an impressive 59% would purchase investment advisory services from such a company.
In each case, the US was well above the global Gen Y average, which rounded out at 40% for banking, 36% for insurance, and 46% for investment advice.
MarketingCharts has indeed found that youth are leading the way in alternative financial offerings. In our comprehensive Marketing Financial Services to Millennials study, we revealed that a majority would be willing to try an offering from an alternative financial company, driven by a belief that these would be offer a better customer experience and look beyond only their credit scores. Additionally, Millennials are the generation most likely to be open to a digital- only bank. Currently, Google and Amazon top the list of non-traditional providers they would be likely to use.
Interestingly, while Gen Y was highlighted in the Accenture report as being open to non-traditional financial services companies, Gen Z consumers (18-21) emerged as less likely to do so, with 41% saying they’d consider switching banking services to one of the GAFA companies.
Also of note: it’s not only technology firms that could provide a challenge to traditional financial services institutions. Close to one-third of global consumers overall (not just Gen Y) would consider switching to a supermarket or retailer for their banking (31%) and insurance (30%) needs. That level of consideration was close to being on par with the GAFA giants.
Aside from non-traditional financial providers, the survey demonstrates that there’s also strong appetite for robo-advice:
- 71% are willing to receive robo-advice about which type of bank account to open;
- 74% are willing to receive robo-advice about which type of insurance coverage to purchase;
- 68% are willing to receive robo-advice for retirement planning; and
- 78% are willing to receive robo-advice about what investments to make.
A recent survey from the Spectrem Group, meanwhile, suggests that first-time investors are using robo-advisors more than human advisors! Close to one-third of wealthy investors believed that robo-advisors do a better job than human advisors when picking stocks to meet risk tolerance (30%) and when selecting investments for retirement plans (28%), per the survey results.
In the Accenture survey, the main benefits perceived by consumers in using robo-advice platforms are the prospect of faster (39%) and less expensive (31%) services. Speed of service is also one of the top factors driving adoption of voice-enabled digital assistants, according to recent research.
Even so, there is a role for human interaction: 68% want to interact with people when dealing with complaints and 61% when they want advice about complex products such as mortgages.
The full Accenture report is available here [pdf].
About the Data: Accenture surveyed 32,715 respondents across 18 markets including Australia, Benelux, Brazil, Canada, Chile, China (Hong Kong), France, Germany, Indonesia, Ireland, Italy, Japan, Nordics (Finland, Norway, Sweden), Singapore, Spain, Thailand, the United Kingdom and the United States. Respondents were consumers of banking, insurance and investment advice services; they were required to have a bank account and an insurance policy and were asked if they used an independent financial advisor, wealth manager or asset manager (investment advisory responses totaled 9,987.) Respondents covered multiple generations and income levels. The fieldwork for the survey was conducted during May and June, 2016.