Bill Gates said it best when claiming that people don’t need banks, they need banking…and the tech industry seems poised to provide just that. According to a survey by consultant Bain & Co. nearly 60% of U.S. bank customers are willing to try a financial product from tech firms they already use. From what I understand, respondents are saying that if they can get the same ‘easy’ experience as they do shopping, they’re in. Bain reports that they are seeing this transition happen in China, where folks do many of their banking activities through WeChat and Alipay. I suspect it won’t be long and we are using our home assistants like Alexa to simply make our deposits and payments with a simple statement. For now, banks have yet to catch up with the digitization that other industries have but with 73% of people aged 18-34 saying they would try a tech firms credit card, deposit account, investment or mortgage, it won’t be long before we see innovations take hold and be accepted. Interestingly, while tech giants like Amazon, Google and Facebook already have expanded into such areas as payments or lending, they have yet to amass deposits. And that’s because federal laws prevent companies from combining commercial ventures with fully fledged banks. Gerard du Toit, a Bain partner and co-author of the report, predicts, banks will partner with Amazon and others, with lenders manufacturing financial products, and tech giants serving as a distribution and servicing channel. In other words, what Amazon already does with consumer goods. I imagine banks would prefer not to be mere factories for mortgages and credit cards but will take what they can get in that new environment. Millennials will continue to shape and direct the future development of all industries and companies who aren’t customer-centric and are deemed untrustworthy will get left behind. In the wake of recent banking events such as Wells Fargo sales tactics, phony account creations and pushy sales associates across financial industries, that practically amount to fraud, many Americans don’t trust banks like they once did. What helps companies like Amazon, is that they wouldn’t have to lure customers as they have millions already, most of whom would welcome a new approach to handling their money and future major purchases. As we move to a cashless society and a QR code world like China has embraced, the battle between traditional banks and tech firms will escalate as each seeks to control as much market as they can in retail banking. Though it could be an interesting battle, I’m probably leaning towards the tech giants who have the hearts and minds of the millennials and will probably benefit from that trust. (Bloomberg, Michael Spencer)