Consumer banking in the last seven years has undergone radical change. Depositing a check no longer happens at the branch or ATM but through a mobile phone. From processing payments to providing loans, financial services that were historically the sole preserve of banks are being usurped by nontraditional competitors, ranging from technology, retail and e-commerce giants, to online-only banks and digital upstarts.
Digital innovations and new consumer behaviors are significant drivers for the rise in alternative banking approaches, such as peer-to-peer lending and mobile wallets. But there is another reason that consumers are turning to new ways of making payments, storing funds, finding loans and even getting financial advice: waning trust.