Here is another reason banks should fear the likes of Amazon.com Inc: A survey showed that consumers are eager to see technology titans take on finance.
Nearly 60 percent of US bank customers are willing to try a financial product from tech firms they already use, a survey conducted by consultant Bain & Co found.
For younger respondents, the interest was especially high. About 73 percent of people aged 18 to 34 said they would try a tech firm’s credit card, deposit account, investment or mortgage.
“They’re saying if you come up with an experience as simple and easy as my shopping experience is with Amazon, I’m ready to do that now,” Bain partner and report coauthor Gerard du Toit said in an interview. “We’ve seen this happen already in China, where it’s common for people to do many of their banking activities through WeChat (微信) and Alipay (支付寶) and players like that.”
Bain’s study drew on a survey of 133,171 people in 22 nations, showing that attitudes vary widely.
More than 80 percent of respondents living in India and China said they are open to trying new financial offers from tech companies — more than double the acceptance rate in France, which ranked most reticent.
While tech juggernauts, including Amazon, Alphabet Inc’s Google and Facebook Inc, are already expanding in the US into areas such as payments or lending, they are not amassing deposits. That is because federal laws prevent companies from combining commercial ventures with fully fledged banks.
Instead, banks are to partner with Amazon and others, Du Toit said, adding that lenders would manufacture financial products and tech giants would serve as distribution and servicing channels. In other words, what Amazon already does with consumer goods.
However, because distribution accounts for two-thirds of banking profits, according to a McKinsey & Co report, banks might not love being relegated to mere factories for mortgages and credit cards.
Because Amazon would not have to pay to lure customers — it already has millions of them — it could afford to set up digital accounts without “all the nuisance fees and relatively high minimum balances” that lenders impose, Du Toit said.
That would appeal to young consumers, who are most likely to try new things, he said.
“It’s just a matter of time before we see the big tech players enter retail banking in the US,” Du Toit said. “You’re going to see a Darwinian battle between banks and tech firms, and some surprising combinations on how they get to market.”
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last