Many established brands have learned – the hard way – that no matter how long you’ve been top of your market, the customer is always king. And what the modern-day customer wants is innovation: a better, easier, way of doing things. This is no less true in financial services.
To learn more about this sector, we surveyed 7,000 people across Europe about their financial services wants and needs, current and future.
We discovered a bold, progressive consumer who is open to radical changes in the banking and insurance sectors, and this attitude is particularly strong in the UK when it comes to areas like digital and data-sharing.
Here are three key insights from the report that highlight the need for change.
- UK consumers want convenience
Digital has irrevocably changed consumer behaviour across the world. People are increasingly willing to embrace innovation if it means a more convenient experience, and our research found that UK consumers value convenience particularly highly when compared across the rest of Europe.
More than three-quarters (77%) use online banking regularly, while 56% use automated self-service facilities.
This desire for convenience reflects what we’ve seen in other sectors, where brands like Uber and Airbnb have dominated their respective markets by providing a service that puts the user experience first (you only have to watch the TED Talk with Airbnb co-founder Joe Gebbia, to see this in practice).
We know what UK consumers want from their bank or insurer – it is now up to financial services firms to be pro-active in meeting those needs and make sure competitors don’t get there first.
- Across Europe, Brits are the most open to sharing data
UK consumers are more willing to share their data with banks and insurers than any other European country, but only in return for added value.
More than two-thirds (69%) of UK consumers would swap their data for a lower mortgage premium, while 53% would trade it for relevant recommendations for products or services and half would give it up in return for updates and advice on their spending habits.
This represents a huge opportunity for the sector, more than anywhere else in Europe. Customers have given a clear mandate that they’re willing to sell their data. Financial services firms would be unwise not to capitalise on that fact.
Other opportunities lie in the services offered by banks and insurers – traditionally limited to financial products.
Our survey discovered that UK consumers are actually open to buying non-traditional services, such as energy (36%), broadband (34%), or personal data storage (32%) from their bank or insurer.
Again, this opens up a number of new revenue opportunities for financial services firms that are too potentially lucrative to be ignored. Those that act now stand the best chance of protecting their market share.
- The threat of disruption from tech giants is real
With new opportunities, however, come new threats. Have you ever considered the idea of the ‘Bank of Google?’ Seems like a strange concept now, perhaps, but our research indicates it is far from implausible.
A fifth (21%) of UK consumers would gladly buy banking services from tech giants such as Google, Amazon or Facebook, and almost a quarter (23%) would buy insurance services from them.
While more than a third (35%) of UK consumers have never switched bank or insurer, two-fifths (39%) would do so if their current provider didn’t offer up-to-date technology.
Those willing to innovate now will reap the rewards later
All of this tells a simple story: UK financial services firms need to act now, or risk being left behind.
But this isn’t just about individual change – it requires industry-wide collaboration. The whole sector must invest in modernising its infrastructure if it wants to survive against increased competition. Other sectors have been disrupted by new players – there is no reason this can’t – or won’t – happen in financial services.
Those willing to change with the times and keep up with consumer expectations will reap the rewards in the long-run.
Download the full report today for lots more insight.
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