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Apple’s dividend announcement this week drew lots of attention to the mountain of cash the tech giant’s sitting on. All this has sparked interest among financial analysts in the possibility of the company entering the banking industryat some future point.
The strategic marketing and research consultants at KAE, working with Toluna, experts in online polls, surveys and opinions, looked into the possibility and recently revealed their research study into the opinions of consumers about Apple’s prospects in banking.
The survey, using Toluna’s global research panel community of 4 million consumers worldwide, collected data from over 5,000 respondents, across the US and UK. The research found that one in ten people (10%) would consider banking with Apple. Of those who are already Apple customers, 43% would consider switching to Apple for their daily banking needs.
The levels of trust generated between Apple and their customers was the main reason given for a possible switch to an Apple Bank, with around two-thirds citing their trust in the brand (66%) as the primary reason, and just over half claiming they think Apple would make their account easy to access and manage, as well as providing a reliable service.
It comes as no surprise that the majority (81%) of people who would bank with Apple are technology savvy and currently do their banking online. In terms of overall attitudes towards banking, the study also found that these consumers display great interest in using their smartphone for personal banking (62%), and are even of the opinion that call centres may not exist in the future as everything will be done online (53%).
Of those surveyed in the UK, almost one in five currently bank with Lloyds Banking Group (18%) or Barclays (14%), while in the US almost a quarter (23%) are with Bank of America and around one in ten with JP Morgan Chase (11%).
David Rankin of KAE says: “Apple would face no capital constraints in building a deposits base. With a proven ability to cross-sell additional products, along with the highest sales per square foot of any retailer and an affluent customer base, it wouldn’t take long for Apple to become one of the most profitable consumer banks in recent times. Once the power of the Apple brand and its options for growth are understood, it tends to prompt one of three responses from financial institutions: accelerated invention, defensive benchmarking or blissful issue avoidance. We know that not everyone would be impressed by the arrival of an ‘iBank’; we also know that the boldness of the next big Apple move will inspire and terrify in equal measure”.
“The strength of Apple’s relationship with consumers is a result of its ability to redefine the terms of competition in an industry and design emotionally rich ‘human’ experiences”, said Lee Powney, Chief Commercial Officer at KAE. “This research tells us Apple customers perceive a fit where at first glance we would assume the brand could not travel. To observe a ‘wrong’ and ‘make right’ is a core characteristic of this business. Apple’s ethos, its way of being and way of doing is instinctively understood by its customers. This makes it a truly dangerous animal to a startling array of sectors”
On the likelihood of Apple entering into this sector, Powney also added “When you look at the possible cross fertilisation effects on purchases of moving this amount of cash into the model, and the resulting increases in preference for its platform from developers and content owners, it would take a remarkable display of discipline to resist. However it would be very ‘un-Apple’ to simply enter into a market without changing the terms of competition”.
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