It's not just Facebook that worries bankers, however. Some predict that Amazon and Google will soon try to open a bank or credit union.
"It's a matter of not if, but when," said Salman Syed, vice president of business development at Marqeta.
And unlike Facebook, which has trust issues, consumers may well welcome the other big tech firms with open arms. Roughly 42% of recent and prospective homebuyers are potential supporters of having tech companies as mortgage providers, according to a survey released Thursday by PwC.
“That would become a great challenge for financial institutions,” said David Schiff, a principal in PwC's financial services advisory practice.
Schiff said consumers embracing tech companies for something as complicated and important as a mortgage is a direct result of them turning more to alternative lender over the years, especially online players such as Rocket Mortgage.
The survey showed that 34% of borrowers use online lenders, and consumers under 35 are more than twice as likely to use such a company.
“Digital is an option to help banks engage earlier, understand the needs of a particular individuals, and proactively help them meet their goals,” PwC said in the report accompanying the survey results.
Time really is money
Several small banks are struggling with whittling down onboarding times for new customers and products.
Several attendees said they were in search of fintech partners that could help them create a smooth and speedy sign-up system that sill weeds out fraud.
The objective of many companies is to get the time spent opening an account below three minutes, said David Mitchell, president of the core systems provider Nymbus.
“There are a lot of people out there starting digital banks,” said Greg Bynum, president of the $306 million-asset Lead Bank in Garden City, Mo. “The goal is to touch customers where they are, then direct them to deposit products. … The issue is onboarding.”
Read the full article at American Banker here.