Changing Trends in Primary Financial Institutions: Traditional Banks vs. Fintech Companies
The traditional concept of having only one primary financial institution is gradually changing, especially among younger people, due to the development of digital platforms, according to a recent report by Consumer Insight, a local market research firm.
The report, based on a survey of 10,917 financial consumers nationwide, revealed that while 80.7 percent of respondents still selected a legacy bank as their primary financial institution, fintech companies, such as internet banks, ranked second with 9.8 percent, and securities firms came in third with 4.4 percent.
Interestingly, the proportion of consumers using a bank as their primary financial institution increased with age, with older age groups showing a higher preference for traditional banks. However, fintech usage was significantly higher among younger age groups, with 17.5 percent of those in their 20s primarily using internet banks.
The main reasons cited for using traditional banks as a primary financial institution included habit, long-term relationships, income deposits, and management of living expenses. On the other hand, consumers who primarily used internet banks highlighted the convenience of transactions and unique products and services as key factors.
Commercial banks are now intensifying efforts to attract younger customers, recognizing them as key to establishing long-term customer loyalty. As the report suggests, the ease of mobile financial transactions is expected to be a crucial factor in choosing a primary financial institution in the future.
The shift towards digital platforms and the increasing popularity of fintech companies among younger consumers indicate a changing landscape in the financial services industry, with convenience and innovation playing a significant role in shaping consumer preferences.
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