The following is an excerpt from Lauren Lyons Cole | December 5, 2015 | ibtimes.com |
The future of banking looks bright, at least for consumers. Tech-savvy millennials are opting for online and mobile banking options over visiting local branches, which will significantly change the way banks do business.
Traditionally, banks have relied heavily on in-person interactions to push products and make sales, but that approach is often better for the bank’s bottom line than for the customer’s. Banking representatives usually earn sales commissions, which means a customer who walks into a local branch might walk out with an unneeded loan or mutual fund.
“A lot of people have been taken advantage of by the so-called relationship,” said Odysseas Papadimitriou, CEO of the personal finance websites WalletHub and CardHub. “You like the person, or you don’t like the person, so you're making decisions in a much less rational way.”
An increasing number of technology firms are creating digital solutions to the everyday financial problems Americans face, making it easier to avoid the headaches and fees associated with traditional banking. Removing the human touch might leave some nostalgic for a friendlier age, but it could lead to greater wealth accumulation as consumers make decisions based on data, rather than a handshake.
“It’s a significant change. Those of us that have a little gray hair tend to think of services that we buy from banks, whereas millennials don’t have that at all,” said Dean Nicolacakis, a partner at PWC who co-leads the firm’s FinTech practice. “Their presumption is that there has to be some app out there to take care of whatever their needs are.”
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