In any business, the customer is king. The financial services sector is no different. We wanted to learn how people want to use financial services today. And their expectations for tomorrow. So we asked 7,000 consumers across Europe to see how the banking and insurance worlds are evolving when it comes to customer wants and needs.
What we discovered is a bold, progressive consumer who is open to radical changes in the banking and insurance sectors.
Convenience matters most
Digital has irrevocably changed consumer behaviour. People are willing to embrace innovation, especially when it makes interaction more convenient.
We’re actually seeing security concerns take a back seat in the wake of convenience. Mobile ranked the second least secure channel, yet 61% expect to use it more over the next five years. By contrast, 58% plan to use traditional branches – the most secure channel – less.
The convenience factor scores highly with payments, too. The most used channels on a weekly basis are online banking (74%) and self-service (64%).
And even though daily cash usage remains high at 44%, it’s gradually losing its dominance. More than a fifth (22%) now use contactless cards every day; while new technology such as wearables (22%) and cryptocurrencies like Bitcoin (20%) are not far behind.
Change brings opportunity
These changes bring massive opportunities for the financial services sector. Consumers are bolder than ever before, so it’s time to meet this boldness with bravery and think beyond the traditional banking and insurance product categories.
Almost a third (31%) would consider buying non-traditional services such as broadband, energy or data storage from their bank or insurer.
Those that take action now have the opportunity to protect market share whilst differentiating themselves with broader offerings within the swiftly evolving, digitally transformed, financial services sector.
New threats on the horizon
With opportunities, of course, come previously unseen threats. A fifth (19%) of European consumers would buy banking or insurance from tech giants such as Google, Amazon or Facebook if it were offered.
This is hardly surprising when you consider that consumers rate customer experience and brand as most important when choosing financial services products.
But this needn’t spell the end for traditional financial services.
63% of consumers believe there are already enough banking and insurance suppliers. Provided financial services firms remain relevant and attractive to these increasingly digitally savvy consumers, they may still maintain a strong advantage.
Data is the key to success
How can one succeed then? Data security and privacy has been a hot topic in recent months, with plenty of fear-inducing press coverage and high profile leaks and breaches.
Despite this, consumers are actually fairly optimistic about sharing their data with financial services firms and this holds the key to thriving.
In fact, 97% of European consumers say they’re happy for banks or insurers to use their data if it’s used to offer them value such as lowering their mortgage premium (59%), recommending relevant products and services (47%), or helping to keep them informed of spending habits (44%).
This shows a massive shift in the consumer mindset and presents a fantastic opportunity:
Customers are telling us they’ll happily trade their data provided they get something of value in return.
Innovate or be left behind
The financial services sector must continue to build on its digital success and commit to ongoing innovation. To be successful and stand up to increased competition, it must invest in modernising its own infrastructure and participate in industry-wide collaboration to drive innovation.
Consumers want to see their needs met and they’re swiftly adopting and adapting to new technology – more than a third (37%) would switch bank or insurer if their current provider didn’t offer up-to-date technology.
The modern-day financial services sector must come together to boldly embrace this, or risk being aggressively disrupted, with the spoils going to those willing and able to keep up with consumer expectations.
If you want to learn more about the rapid impact of digital on the financial services sector, read the full report today.