More than a third of European consumers would move bank or insurer if they didn’t offer up-to-date technology to aid interaction. Nearly a third are already embracing mobile payments, while a fifth are already using wearables and crypto-currency to pay. Almost a fifth would buy banking or insurance services from challengers such as Google, Facebook and Amazon.
Fujitsu has released a Europe-wide study highlighting the shift in consumer interaction with their banks and insurers, as digital-first demand continues to drive a new pace of change. According to the 7,000 consumers who took part in the Fujitsu-commissioned survey, digital plays an increasingly prominent part in their banking and insurance interactions, with more than a third (37 percent) threatening to leave their provider if they don’t offer up-to-date technology. While traditional payments still remain popular – 44 percent of consumers still use cash to pay daily – new digital payment methods are coming to the fore.
Consumers are showing they are open to innovative services to make their lives easier, with 32 percent already embracing mobile device payments, while 22 percent have adopted wearable technologies and 20 percent crypto-currencies, the latter driven by Eastern Europe usage where 44 percent say they use the technology. “Today’s customers are no longer guarded,” said Francois Fleutiaux, Senior Vice President and Head of Sales, EMEIA, Fujitsu. “When it makes interaction more convenient they are willing to embrace innovation. They may not know where they need it until it is offered, but this is where technology comes to the fore – it is the engine that is driving consumer expectations forward and the financial services sector has to live up to this new pace of change.”
This progressive consumer attitude has also led to a shift in expectations from Financial Service providers and a willingness to buy more services from them; offering a wealth of opportunity to current providers. One in three said they would consider buying energy for their home; the same figure agreed on personal data storage, while 30 percent said they would purchase broadband services from their bank or insurer. Yet with this progressiveness comes a warning bell to traditional providers. Already a fifth of respondents said they would buy banking or insurance services from potential disrupters like Google, Amazon or Facebook. This digitally open attitude also extends to day-to-day interaction with banks. Online banking is the most popular channel across Europe, with three in four using it at least once a week. Yet, while traditional channels are declining in comparison, they still represent a huge swath of consumers; 34 percent visit their bank branch at least weekly, while an even higher 36 percent use the telephone to speak with their banking provider.
“While there is no doubt we are moving towards a digital world, this shouldn’t and doesn’t mean that traditional channels are ‘dead’,” said Fleutiaux. “For consumers, digital simply means a new way to communicate whether that be their bank, insurer or their favourite retailer – in whatever way suits them. ‘Traditional’ methods and face-to-face interaction still have a place in modern-day banking and insurance. Providers that will be successful will be the ones who modernise their back office to integrate these various channels to create ‘banks and insurers of the future’ that provide their customers with all options.”
Consumer attitudes to innovation have also impacted data sharing. Across Europe, 97 percent of those surveyed said they were happy for banks or insurers to use their data to offer them a wider range of services; a huge shift in consumer mindset. Almost three in five (59 percent) would be happy for their bank or insurer to use their data to lower their mortgage premium; Nearly half (47 percent) of consumers would allow banks or insurers to use their data to recommend relevant products and services; More than two in five (44 percent) want their data used by banks or insurers to keep them informed of their spending habits and offer relevant advice; More than a third (36 percent) would like their data used by banks or insurers to amend their credit rating.
“The Financial Services sector must continue to build on its digital success and commit to on-going innovation. To be successful – and stand up to increased competition – it must invest in modernizing its own infrastructure and participate in industry-wide collaboration to drive innovation,” said Fleutiaux. “Working with the industry and suppliers, banks and insurers can ensure new channels, services and technologies see mass adoption. Ultimately, consumers want evolution; the modern-day Financial Services sector must come together to boldly embrace this, or risk being forgotten.”
The study into the maturity of financial services across EMEIA was commissioned by Fujitsu and carried out by independent research company, Coleman Parkes Research, between November and December 2015. The study was split into two core activities:
1. 7000 online consumer surveys were completed by a nationally representative sample of each population across UK, France, Benelux (Netherlands, Belgium and Luxembourg), Spain, Germany, Switzerland and Eastern Europe (Poland, Czech Republic and Slovenia) to understand consumer’s habits and their views and opinions towards current financial services.
2. In-depth interviews with 45 senior business decision makers (C-Level, minus 1 and 2) of large enterprise firms in the finance sector (Retail Banks, Investment Banks, Insurance firms) across the same countries to gain further insights into this issue.
UK statistics of interest:
- 73 percent online bank at least once a week, 60 percent visit self-service or an ATM; 25 percent visit a branch in the same period
- A higher than average uptake of both online banking (77 percent) and automated self-service (56 percent) predicted by UK consumers in five years’ time
- UK consumers are more willing [than the rest of Europe] for banking and insurance providers to use their personal data to offer new services including:
- Lowering mortgage premium (69 percent)
- Recommend relevant products or services (53 percent)
- Keep you informed or spending habits (50 percent)
- Amend your credit rating (44 percent)
- Help track and advise on your health and fitness and offer discounts on your insurance premium (38 percent)
- 36 percent would buy energy for their home from their bank or insurer, 32 percent personal data storage, 34 percent broadband, 32 percent mobile phone contract and 34 percent home telephone – all higher than the EU average
- 21 percent would buy banking services from disrupters such as Amazon, Google and Facebook, 23 percent would buy insurance services from them
- 39 percent would switch bank or insurer if they didn’t offer up-to-date technology
- 42 percent use contactless cards, 20 percent use mobile payment apps, 10 percent use wearables, 79 percent use online payment systems (e.g. PayPal)
- UK consumers use both Chip and PIN (56 percent) and contactless payments (17 percent) more than the average European on a weekly basis
- More than a third (35 percent) have never switched bank