May 28, 2015 Sean Albert
When the Great Recession struck the United States and started to impact the global economy, the ways in which businesses and consumers accessed financial services started to transform rapidly. One could argue that the alternative financial services market really gained notoriety and traction in the mainstream economy because of the struggles that were being faced by less agile and heavily strained traditional lenders, credit score providers and the like.
Now that the recession has become a thing of the past, some analysts argued that the alternative financial services market in the U.S. and abroad would begin to fall backward, but this has not been the case. Rather, the reasons behind consumers and businesses seeking out these services are changing, and a new global report revealed yet another catalyst for growth in the market, and this one is among the more subversive to be seen so far.
EY's telling study
Ernst and Young recently released its latest global commercial banking survey, which revealed customers who fall into this category have appeared to grow tired of technical issues and errors among traditional financial institutions, and as such are moving in the alternative direction. Looking at Canadian companies, specifically, the report found that roughly 28 percent of commercial banking customers in that nation had at least one problem caused by a banking error in the past two years, and nearly half of those entities were less than pleased with the ways in which the issue was handled.
Not surprisingly, the big difference seen here was directly related to the level of modern technology deployments between alternative and traditional creditors. EY affirmed that paperwork reduction, accuracy of transitions and onboarding were among the most popular demands of customers who have since left their traditional institutions in favor of alternative options.
Furthermore, while this might seem high, Canada actually had a higher rate of traditional banking satisfaction when compared to the global scale. The researchers found that only 64 percent of global commercial banking customers were satisfied with their primary institutions.
Fast and agile
Alternative lenders and others in this category of financial markets have proven to be far faster and more agile than their traditional counterparts, and this is largely due to the size of the institutions themselves. Business leaders can often find more specialized and accessible financial services through alternative entities than traditional banks would be able to provide.