Table of Contents
Issues in the Market
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- Key issues
- Abbreviations
Future Opportunities
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- Tackling security concerns
- Beyond the basics
- The high street vs online
- Opportunities to expand mobile banking
- Shift in market for financial advice
Market in Brief
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- Technology ownership
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- Figure 1: British internet penetration at home/work/place of study or elsewhere, April 2002-April 2009
- Almost 90% use the internet for some banking activities
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- Figure 2: Overview of preferred channels for banking activities (combined), June 2009
- Online banking increases but concerns persist among consumers
- Online channels are surpassing traditional sources of financial advice
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- Figure 3: Most popular sources of advice for financial products, June 2009
- Moneysupermarket.com and MoneySavingExpert.com lead the way
- Mobile banking is a niche activity but there is scope to expand
- Security concerns are likely to limit the uptake of contactless payments
Technology Ownership and Usage
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- Key points
- 70% of adults have internet access
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- Figure 4: British internet penetration at home/work/place of study or elsewhere, April 2002-April 2009
- Financial activities are common reason for using the internet
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- Figure 5: Types of activity undertaken on the internet in the last three months, October 2008 and April 2009
- Technology device ownership
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- Figure 6: Technology device ownership summary, July 2009
- Factors that determine technology ownership
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- Figure 7: Technology device ownership summary, July 2009
- New finance related technology is endorsed by government
Consumer Context
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- Key points
- The economic context
- Changing attitudes and behaviour
- Recession leads to increased financial engagement
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- Figure 8: Savings, investment, borrowing and debt repayment – consumers’ expected activity, quarterly indices, 2002-09 (Q2)
Online Banking
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- Key points
- Shift towards online transactions
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- Figure 9: The number of personal customers registered for telephone and internet banking, and the number of transactions, 2003-07
- Around 34 million use internet for banking activities
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- Figure 10: Overview of preferred channels for banking activities (combined), June 2009
- Convenience is the main attraction for consumers
- Online banking has advantages and challenges for providers
- Online banking vs. branch network
- Banking crisis could undermine appeal of online-only providers
- Tackling security concerns, as online banking fraud rises
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- Figure 11: Online banking fraud losses, 2004-08
- Recent online banking developments dominated by security improvements
Mobile Banking
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- Key points
- Mobile phones are ubiquitous
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- Figure 12: Mobile phone subscribers, 2003-08
- Mobile banking – a niche but evolving activity
- A range of mobile banking services is available
- Different approaches to charging structures
- Recent mobile banking developments
- Interest among consumers but there are barriers to overcome
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- Figure 13: Attitudes towards mobile banking, June 2009
- Security fears may be overstated
- Expansion of smartphones will boost mobile banking
Contactless and Mobile Payments
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- Key points
- An evolution in UK payments
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- Figure 14: Volume of cheque*, plastic card** and automated payments^ transactions, millions, 2002-18
- Moving towards a cashless society
- More than three million contactless payment cards in circulation
- Banks take different approaches to rollout
- The role of retailers
- The consumer perspective
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- Figure 15: Attitudes towards contactless payment technology, June 2009
- Recent market developments
- Mobile payments – the next big thing?
- Development of mobile wallet concept
- Helping to tackle financial inclusion
- Pre-paid cards as a launch pad into mobile banking
Online Advice and Money Management
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- Key points
- Online sources of advice are changing the advice landscape
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- Figure 16: Most popular sources of advice for a range of financial products, (includes banking, general insurance and long-term products) June 2009
- But online advice doesn’t always translate to online sales
- Usage of personal finance websites
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- Figure 17: Usage of selected personal finance websites, June 2009
- Independent money websites strike a chord among consumers
- Taking an independent approach to financial matters
- A new breed of money management providers
- An opportunity for financial service providers?
- Making finance fun
- Mobile money management
Financial Services and Social Media
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- Key points
- Social networking has become a mass-market activity
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- Figure 18: Usage of selected social networking sites, June 2009
- Advantages of using social media
- Examples of online communities
- Communities for finance professionals
- Challenges of using social media
- Consumer activism
- Gaining and maintaining interest
- An evolving marketplace
The Consumer – Purchasing Financial Products Online
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- Key points
- General insurance products are more likely to be purchased online
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- Figure 19: Online purchasing of financial products, June 2009
- Online purchasing behaviour – a three-way split
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- Figure 20: Repertoire of number of financial services products bought online, June 2009
- Online purchasing is more likely among high earners
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- Figure 21: Demographic overview of repertoire of number of financial services products bought online, June 2009
- General insurance – the ‘starter purchase’
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- Figure 22: Buying financial services products over the internet, by repertoire of number of financial services products bought online, June 2009
- Age is not the barrier often cited…
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- Figure 23: Financial products bought online, by gender, age, socio-economic group and gross annual household income, June 2009
- … but younger adults will be easier to convert to online channels
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- Figure 24: Financial products that people would consider buying online, by gender, age, socio-economic
- Under-24s need more support to use online channels
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- Figure 25: Financial products that people would consider buying but not online, by gender, age, socio-economic group and gross annual household income, June 2009
The Consumer – Channel Preferences for Banking Activities
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- Key points
- Online is becoming increasingly popular for regular banking activities…
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- Figure 26: Preferred channels for banking services, June 2009
- … but face-to-face channels still have the edge for advice and queries
- Men are more likely to complete more detailed transactions online
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- Figure 27: Online banking activities, by gender, age, socio-economic group and gross annual household income, June 2009
- What people want from their bank branch
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- Figure 28: Face-to-face banking activities, by gender, age, socio-economic group and gross annual household income, June 2009
- Telephone banking – a support service?
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- Figure 29: Telephone banking activities, by gender, age, socio-economic group and gross annual household income, June 2009
- A multi-channelled model?
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- Figure 30: Overview of preferred channels for banking activities (combined), June 2009
- Mobile remains a niche banking channel
The Consumer – Attitudes Towards Online Banking
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- Key points
- Online banking provokes mixed opinions
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- Figure 31: Attitudes towards online banking and security, June 2009
- Shifting attitudes as convenience becomes more important
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- Figure 32: Positive and negative attitudes towards online banking and security, by gender and age group, June 2009
- Tackling security concerns and providing a sense of control
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- Figure 33: Positive and negative attitudes towards online banking and security, by attitudes towards online banking and security, June 2009
- Online banking users have security concerns
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- Figure 34: Attitudes towards online banking and security, by preferred channels for banking services, June 2009
- Security concerns influence online purchasing behaviour
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- Figure 35: Attitudes towards online banking, by the likelihood to have arranged current account online, June 2009
- Higher earners are more likely to opt for online providers
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- Figure 36: Attitudes towards the security of high vs online providers, by age group, socio-economic group and gross annual household income, June 2009
- Banking crisis – positive for high street providers?
The Consumer – Channel Preferences for Financial Advice
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- Key points
- Bank staff and price comparison sites are most popular sources of advice
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- Figure 37: Most popular sources of advice for a range of financial products, June 2009
- Different sources of advice for different financial products
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- Figure 38: Preferred sources of advice when arranging financial products, by type of product, June 2009
- Online sources of advice appeal to under-35s and more affluent groups
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- Figure 39: Key demographics for preferred sources of financial advice, June 2009
- Most people use multiple sources of financial advice
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- Figure 40: Cross-analysis of sources of advice when arranging financial products, June 2009
- Online advice is likely to be crucial in the expansion of new technology
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- Figure 41: Preferred sources of financial advice, by selected attitudes towards online banking, mobile banking and contactless payment cards, June 2009
The Consumer – Attitudes Towards Online Sources of Advice
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- Key points
- 20 million internet users use price comparison sites
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- Figure 42: Attitudes towards online sources of financial advice, June 2009
- Are financial forums reducing the demand for professional advice?
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- Figure 43: Attitudes towards online sources of financial advice, by sources of advice most likely to be used to arrange financial products, June 2009
- Price comparison sites as a research tool rather than a distribution channel
- 16-24-year-olds most likely to lack trust in online advice
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- Figure 44: Attitudes towards online sources of financial advice, by gender and age group, June 2009
- Internet usage has impact on attitudes towards online advice
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- Figure 45: Attitudes towards online sources of financial advice, by gross annual household income and daily personal internet usage, June 2009
The Consumer – The Key Online Brands
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- Key points
- Moneysupermarket.com top personal finance websites
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- Figure 46: Frequency of usage of internet sites, June 2009
- Most people use a variety of finance and social networking websites
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- Figure 47: Repertoire of number of internet sites used, June 2009
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- Figure 48: Usage of internet sites by repertoire of number of internet sites used, June 2009
- Users of price comparison sites use several different brands
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- Figure 49: Cross-analysis of usage of selected internet sites, June 2009
- More affluent are more likely to turn to online sources of information
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- Figure 50: Demographic overview of users of different types of internet sites, June 2009
- Discussion boards are replacing traditional channels of advice
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- Figure 51: Advice or guidance most likely to use to arrange financial products, by types of internet sites used, June 2009
- Websites influence purchasing behaviour
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- Figure 52: Attitudes towards online sources of financial advice, by types of internet sites used, June 2009
The Consumer – Attitudes Towards Mobile Banking
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- Key points
- Two fifths are interested in mobile banking…
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- Figure 53: Attitudes towards mobile banking, June 2009
- … but security concerns and a perceived lack of need could hamper the uptake
- Almost four million 16-24-year-olds are interested in mobile banking
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- Figure 54: People interested in mobile banking, by gender, age, and gross annual household income, June 2009
- A bonus for busy professionals
- Allaying fears and promoting mobile banking
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- Figure 55: Barriers to mobile banking, by age group, June 2009
- Telephone banking could provide a lead into mobile banking
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- Figure 56: Attitudes towards mobile banking, by preferred channels for banking services, June 2009
- Balancing online and mobile banking channels
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- Figure 57: Attitudes towards mobile banking, by postive and negative attitudes to online banking, June 2009
The Consumer – Attitudes Towards Contactless Payment Cards
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- Key points
- Security worries may hamper the uptake of contactless payment cards
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- Figure 58: Attitudes towards contactless payment technology, June 2009
- Under-35s are the most likely to appreciate contactless payment facilities
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- Figure 59: Positive attitude to contactless payment cards, by gender, age, and socio-economic group, June 2009
- Lost cards are a bigger issue among likely users
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- Figure 60: Attitudes of those postive about contactless payment cards, June 2009
- Chip and PIN has support across the demographic spectrum
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- Figure 61: Negative attitudes towards contactless payments, by gender, age and gross annual household income
- Experience of contactless technology has positive and negative impact
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- Figure 62: Cross-analysis of attitudes towards contactless payment cards, June 2009
- Positive indications for mobile payments
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- Figure 63: Attitudes towards contactless payments, by interest in mobile banking, June 2009
- Online channels will be important
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- Figure 64: Attitudes towards contactless payment technology, by likelihood to purchase a credit card over the internet, June 2009
Appendix – The Consumer – Channel Preferences for Banking Activities
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- Figure 65: Overview of preferred channels for banking activities, by demographics, June 2009
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Appendix – The Consumer – Attitudes Towards Online Banking
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- Figure 66: Full demographic breakdown of positive/negative attitudes towards online banking and views on high street and online providers, June 2009
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Appendix – The Consumer – Channel Preferences for Financial Advice
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- Figure 67: Preferred sources of advice when arranging financial products, full demographic breakdown, June 2009
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Appendix – The Consumer – Attitudes Towards Online Sources of Advice
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- Figure 68: Demographic breakdown of attitudes towards online sources of financial advice, June 2009
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Appendix – The Consumer – The Key Online Brands
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- Figure 69: Frequency of usage of internet sites, by demographics, June 2009
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Appendix – The Consumer – Attitudes Towards Mobile Banking
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- Figure 70: Most popular attitudes towards mobile banking, by demographics, June 2009
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- Figure 71: Next most popular attitudes towards mobile banking, by demographics, June 2009
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Appendix – The Consumer – Attitudes Towards Contactless Payment Cards
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- Figure 72: Attitudes towards contactless payment technology, by demographics, June 2009
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