In the next five years, fintech firms could pose a serious challenge to banks and record a significant increase in consumer adoption, according to a research from UK’s peer-to-peer money transfer platform TransferWise.

The study forecasts that in the next five years, 48% of users would utilise the fintech alternative for at least one service usually offered by their bank and 32% would use the technology provider to meet 50% or more of their financial requirements.

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Further, in the next 10 years, one out of every five consumers would trust fintech providers for all financial needs.

According to current figures, only 32% of consumers have opted for a fintech provider over a conventional provider, mostly for in-store payments.

Besides, 12% of customers have used a fintech provider for international payments, 6% for a loan, and 4% for personal investments or wealth management.

Thirty four percent of consumers cited security concern as the primary driver for the switch to the fintech alternative. Better cost (29%), better convenience (26%) and better customer service (18%) were viewed as the other drivers for this switch.

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The research also stated that the urge to adopt technology providers for financial needs is relatively less among older people.

TransferWise CEO and co-founder Taavet Hinrikus said: "In five years’ time, the financial services sector will look completely different with a host of new providers and innovative new services. In ten years, it will be transformed. The main shift will be in our expectations and behaviour as consumers. Most of us are now happy to use alternatives to banks for more and more of our financial needs.

"In five years’ time, some parts of the sector will be almost universally controlled by non-banks; other parts will be a mix. The most important result will be the true democratisation of finance. The nature of the current "bundled" model of banking is fundamentally unfair. But this is changing – and the consumer will benefit."