Would you bank with Apple?

Apple may have the hottest stock, the coolest tech and the biggest cash pile in history, but consumers would still be wary of switching their bank accounts to a new model iBank.

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Would you bank with Apple?

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Only one-in-ten of 5000 people from the US and UK questioned by pollster Toluna on behalf of consultancy KAE would 'consider' banking with Apple if the opportunity arose. The figure rises to 45% for avid consumers of Apple tech, but still falls short of a majority.

The profile of those consumers who would consider switching their banking services to Apple comprised people aged 25-44, living in city centres or city suburban areas, with an average monthly income of between £900-£2,099 in the UK and $1,000-$3,400 and $6,000+ in the US.

Trust in the brand is the number one reason cited by consumers in favour of iBanking, with just over half believing that Apple would make their account easy to access and manage, as well as provide a reliable service.

Finextra verdict First it was the Bank of Amazon, followed by GoogleBank, then Facebank, and now iBank - the new lunch-eating ogre from the hi-tech industry to be spirited up by spurious research in the interest of generating some cheap headlines. This latest tosh is a classic example of the genre. Despite the fact that only one-in-ten would even consider banking with Apple, the PR arrived in our inbox with the breathless claim that "Banking with Apple could pose serious challenge to high street". Other quotes attributed to KAE executives include the laughable assertion that "it wouldn't take long for Apple to become one of the most profitable consumer banks in recent times" and the slightly desperate "this research tells us Apple customers perceive a fit where at first glance we would assume the brand could not travel". To spare their blushes, we've omitted the names of the guilty parties. Let's be clear: Apple - through its iTunes store - has the potential to disrupt the payments stream, but it has limited appeal as (and probably zero interest in ever becoming) a bank. In fact, we're thinking of commissioning our own research: Would you consider banking with Finextra? The results, one suspects, would be comparable.

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Comments: (8)

A Finextra member 

Conversely:

Q: Would you consider buying a [high-street-bank] branded tablet?

A: Not on your life. Not even ironically

Brett King

Brett King CEO & Founder at Moven

Interesting. Although, you could make the argument that anyone with an iTunes account that has a positive value, is already banking with Apple.

Let's ask the question a slightly different way. Would you buy a bank product through an iTunes store? Or would you make a payment using an iTunes account linked to a iPhone wallet?

The answers might be very different. 

 

A Finextra member 

Agreed Brett. Full service banking might not be around the corner for Apple, but, as per our recent discussion on the related blog post on here, I think payments (call it iPay) could still prove very disruptive to banking's natural payments ecosystem. It might not happen right away but certainly if Apple can create a powerful (and secure) user experience around payments, perhaps the question of full-service banking is irrelevant. As you well know, the bank of the future probably does not look like the bank of the present!  

Nick Green

Nick Green Consultant at ISD Consultants

Darren, you have to be careful iPay is an existing brand owned by Planet Payment - proof that Apple don't own everything "i".

A Finextra member 

Good catch Nick. I don't know what they would call it but my guess is it would have an 'i' in front of it. Also, with $98 bn in cash, probably if they wanted to use the trademarked term 'iPay', they could come to an agreement with the owners of it. Much the same as they did with the company that previously owned 'iPad'.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

"Would you buy a bank product through an iTunes store?" Yes, if banks dumbened down their products to match an average iTunes SKU's complexity. On second thoughts, in that case, I wouldn't need that product anyway and won't buy it from anywhere. 

"Or would you make a payment using an iTunes account linked to a iPhone wallet?". Yes, for products priced similar to an average iTunes SKU's. But, then I could do the same with Boku or Zong or PayPal or Google Wallet (the Google Play one, not the NFC one), so why Apple? 

Regardless of the answer, I'd continue to be banking with my bank that issued my credit card, not Apple. 

A Finextra member 

In response to finextra critique of this press release

This is one in a series of releases highlighting a large study KAE have conducted across the US and Europe to explore the capacity of the Apple brand to extend into new markets. Financial Services, being just one category we explored. We feel 1 in 10 consumers is a huge number and supports the headline.

We do not believe Apple’s ability to command the consideration of 10%
of consumers on entry into banking (where they have zero pedigree) to be of minor relevance.

Consumers were presented with a range of differing brands to
consider. Only 1 other brand showed significant appeal for banking services. A brand not listed in your commentary. We will be making another announcement shortly on this.

We clearly stated a move into Banking is unlikely. The intent
of releasing highlights from our study is to provoke debate around how Apple has created such appeal and trust.

One key statistic which you have omitted from your commentary
is that over 40% of Apple customers would consider banking with Apple. This includes those who own a single low cost device such as an iPod (where their involvement and exposure to the wider Apple ‘experience’ could be considered lower). This highlights the level of trust in the brand is huge and consumers do see a fit for Apple.

The question I believe is of more relevance to the Financial
Services industry is why Apple is able to transcend its own categories and
enter into a seemingly unrelated area?  I suggest a close examination of how Apple is able to design consistently rewarding experiences across devices, software, and retail.

Apple has a range of options open to it around payments.
Naturally it needs to own the payment experience. Its portfolio and ecosystem model creates pressures to design additional consumer benefits for owning more devices and consuming more content. Expect to see innovations around payments which provide user-to-user benefits only accessible to Apple device owners, on the phone, on the tablet, and in the living room…

Lee Powney, CCO, KAE

Ward Hagenaar

Ward Hagenaar Head of Consulting - Co-Founder at PaymentGenes

In 2000 at Interpay we used the name i-pay for e-commerce payments via Maestro, MasterCard and VISA SET. SET whas the standard for Secure Electronic Transactions based on PKI connectivity between merchant, consumer and gateway. Extremely secure as nobody managed to install the certificats at that time.... To complex and not usercentric.

With iTunes Apple could start facilitating secure remote mobile payments for other e-commerce sites or Apple Stores, Apple resellers, etc.

 

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