Over the past ten years, innovations in technology have dramatically changed how each industry operates and communicates, and the banking and finance sector is no different. The most recent disruptive change was in payments, firstly with contactless cards and now with the launch of Apple Pay. As we see Apple move in on the finance space, the question I’m asking is, ‘is the banking sector the next big thing for Apple?’
Apple is a hugely successful and respected brand across a range of sectors, from electronics products to the music industry. As a company, it is devoted to innovation, which means it is often the game-changer in the markets it operates in. Apple Pay has already seen widespread adoption across the UK, starting with its implementation throughout London’s public transport and now it’s availability at countless shops and restaurants including Lidl, M&S and Pret.
The banks who are ahead of the curve have ensured they are compatible with the app, these include American Express, Santander and RBS. Additionally, virtual banks such as ING are future-proofing themselves, making sure they are on the cusp of technological advancements to appeal to more technically savvy or younger audiences.
However, if Apple does make the move into banking, should traditional banks with their decades of experience be worried? Recent research by uSwitch found that, almost a quarter (24%) of young people believe that tech companies such as Google, Apple and Amazon could do a better job than a traditional bank in offering financial products.
Younger generations identify with Apple and already trust the organisation with plenty of its offerings. Couple this with the loss of customer trust in banking post the recession, these consumers may be easily swayed to turn to the likes of Apple in terms of their finances should they be given the choice. We’ve also seen a massive hike in younger people consuming more and more ‘traditional’ products and services online, and this will only continue to increase.
I believe the next 18 months will be very exciting for the banking industry - it will be interesting to monitor Apple’s next moves in this space as Apple Pay picks up steam.
- Kyle Ferguson, CEO, Fraedom