Millennials losing faith in traditional banks, trust tech firms more

New research from financial regulatory compliance company Neopay has found that Millennials trust traditional banks far less than previous generations and are more likely to put their faith in alternative providers.

by Helen Leggatt

Younger consumers no longer consider traditional banks as the only option for managing their finances. More and more are opting to trust their finances to e-money channels, according to Neopay's recent research.

The report, 'Are Banks Losing the Innovation Game?', is the result of interviews with 2,000 UK adults on their experiences with high street banks and e-money transactions. It found that 50% of 18-24 year olds would not trust traditional banks with e-money transactions. Meanwhile, 32% would trust a technology firm, such as Google or Apple, with their e-money transactions, compared to just 17.5% of older generations.

Among 25-34 year-olds, 41% said they would not trust a bank with e-money transactions, the report found. The older the audience, the bigger the trust in traditional banks.

"Traditionally, banks have been synonymous with dependability and solidity. However, since the banking crisis, the sturdiness of banks has been cast into doubt. Also, the increasing frequency of scandals, combined with concerns about infrastructure and reliability, and the increase of automated processes have all served to erode trust and undermine the reputation of our banks," said Scott Dawson, commercial director at Neopay. "At the same time, we've seen the emergence of new technology companies that are rich with our personal data and are seen to be fueling much of the innovation and growth across the wider economy."