Trust in tech firms entering the financial sector is strong and rapidly improving to close the gap with traditional banks in Asia Pacific where 77 percent already prefer accessing their banking services via digital channels.

According to the research firm Forrester, banks continue to lead in trust rankings regarding consumers’ financial interest but tech firms are rapidly catching up. In India, for example, Google outranked banks as the most trusted company to act in their best financial interest. In another tech-savvy nation like mainland China, companies like Alibaba and WeChat were only slightly behind their traditional competitors.

In addition, global tech giants, payment providers, e-commerce players, and even ride-sharing leaders are threatening the pole position of incumbents by providing simple, convenient, and more personalized digital experiences.

Across all eight markets surveyed, the preference for digital channels dominated in banking as agreed by 69 to 79 percent of respondents in any given market. 78 and 76 percent of respondents in Hong Kong and Singapore, respectively, preferred digital channels for banking with the former ranking the lowest for branch preference (7 percent).

Digital played dominance in banking is not so much replicated in the insurance sector where only between 32 and 59 percent of respondents in the various markets preferred digital channels. In markets like Singapore and Malaysia, agents were the most preferred channel as agreed by 46 and 41 percent of respondents, respectively.

Consumers are more likely to engage with firms that prioritize helping them improve their financial well-being, said Dane Anderson, VP, research director, and regional manager at Forrester. We expect that customers will dynamically deconstruct their personal financial services ecosystems and reassemble them with newer and better players. Traditional institutions have several advantages but will be left behind if they do not transform faster to meet the challenge.