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Consumer Attitudes towards Financial Services Innovation - UK - February 2017

Published By :

Mintel

Published Date : Feb 2017

Category :

Banking

No. of Pages : N/A

Open APIs have the potential to transform the financial services sector, with providers given greater opportunity to win new customers using personalised products and messaging. Customisation and security are the main two areas for banks to address. Consumers will demand control over their data and additional security measures in order to convince them to opt in.

Table of Content

Overview

What you need to know
Scope of this Report

Executive Summary
The market
Open banking reforms to accelerate innovation
Consumers wary of using challenger brands
The consumer
Majority yet to migrate to mobile
Figure 1: Consumers’ usage of digital financial services, December 2016
Most people have a limited financial ‘comfort zone’
Figure 2: Repertoire of consumers’ usage of digital financial services, December 2016
Providers must educate and empower to overcome scepticism
Figure 3: Interest in new and potential innovations, December 2016
Half of consumers could be persuaded to ‘opt in’
Figure 4: Ways of encouraging consumers to share information with financial services providers, December 2016
Consumers polarised by physical vs digital
Figure 5: Attitudes towards banking channels and interactions, December 2016
What we think

Issues and Insights
Opening the financial floodgates
The facts
The implications
Education and empowerment can overcome scepticism
The facts
The implications
Forming new communication channels
The facts
The implications

The Market – What You Need to Know
Contactless payments trigger further rise in card transactions
Digital dominates day-to-day
Acquisitions ahead
Open banking reforms to accelerate innovation

Market Background
UK still far from a cashless society
Figure 6: Volume of payments made in the UK, by payment method, 2015 and forecast for 2025
Digital dominates day-to-day
Figure 7: Retail banking channels used to complete various activities, July 2016
Consumers start to think ‘mobile-first’…except in financial services
Figure 8: Ownership of computing and mobile devices, November 2014-September 2016
Consumers wary of using challenger brands

Regulatory Context
Open banking reforms to accelerate innovation
Figure 9: Overview of the CMA’s open banking remedies, announced in August 2016
PSD2 due to go live in 2018
FCA creates ‘safe space’ for testing innovations

Recent Market Developments
Open banking APIs
Cloud computing in financial services
Online and mobile banking security
Figure 10: HSBC biometric login option using Apple’s Touch ID, shown on iPhone and Apple Watch
Figure 11: Synaptics multi-factor ‘Fusion Engine’ software, launched January 2017
Mobile payment services
Figure 12: Awareness and use of selected mobile payment schemes, April 2016
Finance management apps
Figure 13: Money Dashboard’s mobile and desktop budgeting trackers
The rise of AI
Telematics
Blockchain

The Consumer – What You Need to Know
Majority yet to migrate to mobile
Providers must educate and empower to overcome scepticism
Half of consumers could be persuaded to ‘opt in’
Nearly half of adults believe mobile banking is risky
Consumers polarised by physical vs digital

Usage of Digital Financial Services
Majority yet to migrate to mobile
Figure 14: Consumers’ usage of digital financial services, December 2016
Most people have a limited financial technology ‘comfort zone’
Figure 15: Repertoire of consumers’ usage of digital financial services, December 2016
Latest innovations a step too far for young women
Figure 16: Consumers’ usage of digital financial services, by gender and age, December 2016
Opening the financial floodgates

Interest in New Innovations
Providers must educate and empower to overcome scepticism
Figure 17: Interest in new and potential innovations, December 2016
WhatsAppening with my investments?
Figure 18: Interest in new and potential innovations, by generation, December 2016
Young affluent consumers most interested in robo-advice
Figure 19: Interest in innovative services – CHAID – Tree output, December 2016
The FinTech-savvy crowd will value aggregation
Figure 20: Interest in account aggregation services, by repertoire of consumers’ usage of digital financial services, December 2016

Attitudes towards Data and Security
Nearly half of adults believe mobile banking is risky…
Figure 21: Attitudes towards data and security, December 2016
though users are less afraid
FinTech users most open to personalisation
Figure 22: Attitudes towards sharing personal data, by repertoire of consumers’ usage of digital financial services, December 2016

Incentivising Information Sharing
Half of consumers could be persuaded to ‘opt in’
Figure 23: Ways of encouraging consumers to share information with financial services providers, December 2016
Millennials most open to data sharing
Figure 24: Ways of encouraging consumers to share information with financial services providers – Any (net), by generation, December 2016
Open banking must live up to its name
Figure 25: Ways of encouraging consumers to share information with financial services providers, by ways of encouraging consumers to share information with financial services providers, December 2016

Channels and Interactions
Consumers polarised by physical vs digital
Figure 26: Attitudes towards banking channels and interactions, December 2016
Generations apart
Figure 27: Attitudes towards banking channels and interactions, by age, December 2016
Half of consumers only want essential communications
Figure 28: Attitudes towards banking channels and interactions, December 2016
Digital channels favoured where possible
Figure 29: Attitudes towards banking channels and interactions, December 2016
Experience breeds financial confidence
Figure 30: Attitudes towards banking channels and interactions, December 2016

Online Banking Preferences
Nearly a third of consumers want significant upgrades
Figure 31: Attitudes towards online banking sites and features, December 2016
Majority wary of sharing transaction data
Figure 32: Attitudes towards online banking sites and features, December 2016
One in three people keen to use alternative login methods
Figure 33: Attitudes towards online banking sites and features, December 2016

Appendix – Data Sources, Abbreviations and Supporting Information
Abbreviations
Consumer research methodology
Methodology
Figure 34: Interest in innovative services – CHAID – Table output, December 2016

List of Table

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