Trusting financial institutions is becoming increasingly difficult every single day. Banks are not that great with protecting consumer data, and access to one’s own money seems limited at times. Particularly millennials have an issue trusting their financial institutions with various money matters. Trust in the financial sector continues to dwindle, and alternative solutions are taking hold.
Millennials Will Not Trust Banks With Their Money
The Facebook study conducted to gauge millennials’ trust in the financial sector did not yield any unexpected results. In fact, most people are well aware of how this demographic has little to no confidence in the financial sector. In fact, more than nine in ten respondents echoed this sentiment, which is a spectacularly high number.
To make matters even worse, only five percent of the millennials feels that their bank understands their needs, both on a personal and a financial level. It is not strange to see that percentage either, and financial institutions have been telling people to borrow money for generations, knowing all too well that it will become more difficult to repay it over time.
For local and global banks, this study is just a sign of the mind shift that is waiting to happen in the coming years. It is not just the millennial demographic who have little faith in their banks, as consumers all over the world are dealing with limited access to their money. Withdrawing cash from an ATM or spending banknotes is subject to specific thresholds.
In fact, one could argue that banks want consumers to rely on their service more often than ever before. By limiting access to cash, consumers are forced to pay with wire transfers or payment cards, both of which generate more fees for the banks. Moreover, it allows them to keep tabs on consumer spending habits, which they cannot do in a cash-dominated society.
The bigger question becomes whether the banks can turn this situation around. The dwindling trust will hurt their business models, and it seems unlikely that they can do anything to regain lost trust overnight. A willingness to innovate and test new solutions is one way to go about things, but it is not a long-term solution either.
Technology can accomplish many different things, but it cannot build trust automatically. Banks and other financial institutions continue to make bad decisions, directly affecting customers worldwide. It will take a lot more than just a minor push to regain the trust, even though there are plenty of alternative solutions available. No one is forced to rely on banks by any means.
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