My 17 year old daughter came home literally crying. When I asked her what happened she said "My friend just told me that the bank I had opened an account with will be taking a monthly commission of 10 Shekels! Don't they know I work so hard for the money I make?! Why do they think that it's OK for them to take money from me??!!"
I stood there frozen, debating whether to hug her or tell her that she has a few years before she starts paying commissions, or to take out my cellphone and record the unfiltered response people have to paying commissions to banks.
A few months later, after she heard me explaining the Digital disruption in the financial sector, she drew the picture above. Notice that she didn't draw teeth on the GAFA fish, as opposed to the teeth she drew on the Banks and Fintech startups, which made me wonder - Does her perception indicate generation zs and millennials beliefs?
These generations have been raised using technology naturally, without needing to pay for technological services which they see as normal - they don't need to pay for snapchat, they never needed to pay for Facebook (which they have grown out of), WhatsApp is free, and so is Instagram with all the wonderful filters they can use with no charge. For them the concept of commission is foreign, and seems completely out of touch with their reality. The technological giants don't seem at all threatening to them, because all they see is great companies offering innovative and easy to use products for free.
A few weeks ago I asked her if she would open a bank account with google if she wouldn't need to pay commission for it and would instead be seeing commercials on her bank statements. "Duh" she answered, "of course I would. Do you know when they're going to offer opening accounts?" I asked my husband the same question, and his answer was "Well, I guess so, although I'm not sure if I'd put our savings and Investments there". My dad who came to visit was asked the same question. His answer was quite different "No, I would leave everything in my bank".
Their answers coincide with research showing that millennials and the following generations have no sentiments towards banks, and even many of the older generations would also happily move their finances to technological companies.
What does this mean for banks? Will they be able to change their traditional business models and offer commission free services? Will the regulator allow them to adapt to the technological changes dictating more efficient use of the data they have? Will the banks learn how to use this data before it's too late? And are GAFA ready to take on the responsibility for ppls money in regard to fraud management for example?
As for my daughter, I think she would open a bank account on snapchat if offered.
(This article was published with "The Marker" economic magazine, Mar 2017: http://www.themarker.com/opinion/1.3915600)