Consumer Survey 2017 presented by The Telegraph. What consumers really think

Transcription

1 Consumer Survey 2017 presented by The Telegraph What consumers really think

2 Introduction The Telegraph are delighted to present our first fintech-focused consumer survey, aimed at placing a spotlight on what consumers really think when it comes to their financial services, and how that mindset and behaviours impact fintechs. Contents Introduction 2 The fintech industry is a fine adornment to UK financial services. Home to success stories like Transferwise, Nutmeg and Atom Bank to name a few, it has received estimate valuations in excess of the $1 billion mark. Yet the rate of adoption of fintech services by consumers or businesses is well behind the hype. Following the meeting of the advisory board for The Telegraph Future of Fintech conference in early 2017, it became clear that there s sometimes a risk of fintech professionals only speaking to their peers, and an echochamber effect leading to a potentially inflated sense of success The UK consumer: financial profile and habits 3 Banking services used 4 With this in mind, The Telegraph decided to collect consumer opinions and find out for itself how the public really view fintech or if they have an opinion at all. The Telegraph Future of Fintech Consumer Survey 2017 highlights are detailed in this report, and we hope it provides its readers with a greater insight into prospective customers. If nothing else, we hope that it informs, and brings another dimension to the discussion avoiding the dreaded bubble effect that takes place in some industries. Jeremy Warner Associate Editor The Telegraph London vs the rest of the UK 5 What do consumers REALLY think of fintech? 5 Fintech has penetrated the London market 6 Conclusion 7 About The Telegraph Future of Fintech conference 8

3 The UK consumer: financial profile and habits KEY FINDINGS Five banks serve the majority of the UK consumer market Reliability/trust is still the main criteria for choice of bank The current account market is essentially saturated Take up of insurance products lag behind current accounts and credit services Busting the cashless society myth: 1 in 3 respondents use cash daily and 3 quarters do so weekly; while 1 in 10 don t have a current account Security is not the deterrent to online banking that may assume it is 85% of account holders bank with the big five Q1 With which of the following banks/providers do you hold (a) current account(s)? The high street brands still dominate the current account market with 85% of account holders banking with the big five. 19% 18% 17% Q2 What is most important to you about a financial service? Trust is still king. Reliability is one of the main criteria for consumers when choosing a bank, but ease is queen. Reliability/trust 46% Ease of use 28% Service 16% Financial incentive 7% Prestige 2% Other 1% 16% 15% Base: 450 (all who own a current account) 46% Reliability/ #TelegraphFFT telegraph.co.uk/fft 3

4 Banking services used Q3 Which of the following financial product(s) do you currently hold? Q4 How do you primarily access your banking services, on the following occasions? Current account 90% 50% of new products and services are applied for online (38%) or on mobile (12%). Saving accounts Credit card Building/ Content insurance Pension ISA Mortgage Travel insurance 59% 57% 48% 37% 34% 29% 26% 38% 12% online mobile Life insurance None of these 3% 24% Security concerns are not a major deterrent In fact mobile banking apps are seen as easy, quick and secure. Q5 How frequently do you use the following payment methods? Cash is still big, mobile and wearables are slowly growing Londoners are likely to use tech but don t forget the rest of the UK Wearables are not winning over consumers, but cheques are approaching their final days Cheques are approaching their final days 1. Cash 1% 9% 15% 39% 36% 2. Debit /Credit card 2% 5% 12% 57% 24% Not currently used Less than once a month Monthly Weekly Daily 3. Contactless Debit/Credit card 24% 9% 10% 37% 20% 4. Mobile/wearable technology 70% 6% 5% 10% 9% 5. Cheques 50% 37% 6% 6% 2% #TelegraphFFT telegraph.co.uk/fft

5 London vs the rest of the UK % of respondents based in London have a current account vs 91% for the rest of the UK They also have fewer financial products 3.8 on average vs 4.1 for the rest of the UK Barclays is more popular in London (33% vs 15%) and their international presence is important Cash is still used daily by 40% of Londoners and 33% use it weekly Contactless is used as much as outside of London but more frequently N S What do consumers REALLY think of fintech? Only 12% of those surveyed have heard of fintech, and 7 in 10 don t know any of the main fintech companies Only 10% of those surveyed are currently using fintech companies There is opportunity for fintech companies: financial incentive and user-friendly products could convince a third of non-users to switch to digital-only banks, and over a third of those surveyed would consider using a fintech product Security is seen as the main issue with fintech companies (perception of security as a challenge is lower for retail banks) 2 in 5 would consider investing money via a fintech, but the majority would only invest less than 200 a month that way Q6 Before today, were you aware of the term fintech? Q7 What, if anything, is your main concern about using fintech products? Maybe / don t know 8% Yes 12% Security of your money/investments Protection of your personal data 18% 27% Cyber attacks 18% No 80% Lack of expertise/ experience None of these 18% 17% Other #TelegraphFFT telegraph.co.uk/fft 5

6 Fintech has penetrated the London market London-based respondents are more aware of fintech (27% vs 10%). 52% of those have used a fintech company vs 26% for the rest of the UK Awareness is higher too in London with Atom bank (23%), Nutmeg (13%), Curve (8%), Funding Circle (8%) and Stripe (8%) most well-known brands Londoners are also more likely to invest more in fintech wealth services: 16% of them would invest over 500 per month vs 4% rest of the UK and 35% would invest more than 200 against 16% Security is however seen as more of a concern with fintech, with 35% of Londoners saying it is the main barrier to usage vs 26% for the rest of the UK Q8 What services or incentives would persuade you to leave your current bank to join a digital only bank? Q10 How much would you be ready to invest using a fintech wealth management service? Financial incentive 40% 49% Better services 33% Ease of Use 32% Cheaper 30% Speed of services 27% 16% 13% 17% Ease of process 22% 5% None of these Other 4% 33% Nothing Less than 200 a month a month 500+ a month Not sure Base: 88 (all those who don t use a fintech company) Base: 206 (all those interested in investment in fintech) Q9 Investment: What type(s) of services would you be interested in using? 33% Robot advisor 21% Venture/ P2P lending 32% Wealth management app 30% None of these 29% Virtual Currency Platforms 16% of Londoners would invest over 500 per month vs 4% rest of the UK Base: 206 (all those interested in investment in fintech) #TelegraphFFT telegraph.co.uk/fft

7 Conclusion The results of this survey, I believe, offer a number of important insights, some of them genuinely surprising, others likely to confirm what you already suspect. This survey is a first for The Telegraph leveraging our strength in the consumer space to inform our business audience. Based on responses from 500 people, a cross-section of UK consumers (not only Telegraph readers), the sample broadly represents the population makeup of the country. So what have we learned? Well the bad news is that public awareness of, and trust in, fintech remains low consumers are proving staunchly traditional. There is a way to go in engaging the consumer with what fintech can do for them and public confidence rests with the big banks to keep their money safe. In their view, banking services must offer ease of use, definitely an opportunity for fintech. Perhaps surprisingly, financial incentives when choosing a bank don t figure that highly, but it is a greater consideration for consumers when choosing fintech products. More good news is that banks have persuaded customers of the safety of mobile and online around half of respondents check balances and make transfers and payments online. This trend will no doubt continue to grow and benefit the fintech sector. However, work needs to be done by fintech to allay security concerns over personal data. People want privacy, we in the industry know fintech can deliver it, but the public are going to take some convincing. The main message here is that despite the current lack of awareness and trust, our survey highlights the vast potential there is out there for the fintech sector, both for the incumbents in offering a better customer experience, and for newcomers in reducing the costs of finance to consumers through technological innovation. The future is certainly bright for fintech. Jeremy Warner Associate Editor The Telegraph THE FUTURE OF FINTECH CONSUMER SURVEY 2017 PRESENTED BY THE #TelegraphFFT telegraph.co.uk/fft 7 7

8 About The Telegraph Future of Fintech conference Now an annual event for senior industry leaders, The Telegraph Future of Fintech conference aims to help put fintech on the national agenda. Providing a premium platform for no more than 300 C-suite stakeholders from across financial services and fintech, the conference facilitates real discussion of collaboration, the economic impact of fintech, improving financial inclusion, as well as what it will take to ensure that London holds its dominance as a flagship global capital for investment, talent and growth. To participate in the next The Telegraph conference event please contact Conferences@telegraph.co.uk There is generally a way to go in engaging the consumer with what fintech can do for them, and in building trust in the innovations and products now beginning to come onto the market. Jeremy Warner Associate Editor The Telegraph #TelegraphFFT telegraph.co.uk/fft