Technology giants take on banks

Banks struggling to keep pace with rapid technological change are now facing competition for banking and insurance services from tech giants such as Amazon and Google.

A European-wide study of 7,000 consumers found a fifth would turn to providers including Facebook for their banking and insurance.

Both Google and Amazon have made forays into the insurance market.

Last year, the search giant launched a price comparison site for customers in California called “Google Compare for Auto Insurance”.

Amazon also allows insurers to sell cover on its site as providers explore ways to expand their reach outside of traditional channels.

The findings, in a study commissioned by Fujitsu, show consumers’ changing demands continue to drive digital change in financial institutions.

More than a third of respondents threatened to leave their provider if they didn’t offer up-to-date technology.

Despite the findings, traditional ways of dealing with customers shouldn’t be abandoned but complemented, according to Fujitsu’s Francois Fleutiaux.

“While there is no doubt we are moving towards a digital world, this shouldn’t mean that traditional channels are dead.

"For consumers, digital means a new way to communicate whether that be their bank, insurer or favourite retailer in whatever way suits them.

“Traditional methods still have a place in modern-day banking and insurance.

"Providers that will be successful will be the ones who modernise their back office to integrate these various channels to create banks and insurers of the future that provide their customers with all options,” Mr Fleutiaux said.

There are also additional opportunities for banks and insurers with one in three consumers willing to consider buying energy, data storage and even broadband from them in the future.

Financial services must embrace the new pace of change https://t.co/q4jGQEaGPu pic.twitter.com/fTb6ngAimt

— Fujitsu Global (@Fujitsu_Global) May 4, 2016