Table of Contents
Introduction
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- Consumers, finance and technology
- Abbreviations
Executive Summary
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- The market
- More than four fifths of internet users now banking online
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- Figure 1: Online banking usage frequency, April 2011
- Use of mobile banking on the rise
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- Figure 2: Use of any type of mobile banking service, 2010 and 2011
- Over two thirds have bought a financial product online
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- Figure 3: Buying select financial products online, May 2011
- Contactless cards ownership not yet widespread
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- Figure 4: Level of ownership and usage of contactless debit and credit cards, May 2011
- Market factors
- Seven out of ten UK adults now have a broadband connection.
- Two fifths of internet users have a smartphone
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- Figure 5: Ownership of selected types of technology, May 2011
- Strong growth in NFC-enabled handsets projected
- The consumer
- Attitudes and behaviour towards online banking
- Attitudes towards mobile banking
- Attitudes towards contactless cards
- Consumer interest in mobile payment technology
- New media and financial services
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- Figure 6: Commenting about financial services provider customer services, by new media channels, May 2011
- What we think
Issues in the Market
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- Why hasn’t contactless payment technology taken off in the UK?
- Will mobile ‘tap and pay’ technology be a hit with Britons?
- How much interest is there in buying complex financial products online?
- Can mobile banking become as common as PC-based online banking?
Future Opportunities
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- Defeating security fears
- Adjusting to a more hectic pace of life
Technology Ownership
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- Key points
- Seven in ten UK consumers now have broadband access
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- Figure 7: UK internet and broadband penetration – GB, 2004-10
- Two in five internet users have a smartphone
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- Figure 8: Ownership of selected types of technology, May 2011
- NFC-enabled handset sales expected to rise exponentially
- Tablet PC usage also expected to rise significantly
- Early adopters – the usual suspects
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- Figure 9: Ownership of selected types of technology, by demographics, May 2011
Online Banking
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- Key points
- The number of online banking transactions has grown exponentially
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- Figure 10: Number of registered telephone and online banking customers and number of transactions (MBBGs only), 2002 and 2009
- Online banking hasn’t made the branch network obsolete…
- …but it has revolutionised the way people manage their accounts
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- Figure 11: Use of banking channels, April 2011
- Mobile online banking channel still in its infancy but emergent
- Younger generation reflects mobile banking’s significant potential
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- Figure 12: Use of any bank channel, by demographics, April 2011
- Tech- and finance-savvy of the more affluent also evident
Attitudes and Behaviour towards Online Banking
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- Key points
- Over three fifths say they now do all their banking online
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- Figure 13: Level of agreement with statements about online banking and security, May 2011
- Consumers have largely got over security concerns…
- …but security will always be an issue regardless
- The password problem
- 25-44s form the core group of consumers moving finances online
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- Figure 14: Agreement with statements about online banking and security, by demographics, May 2011
- The convergence of tech- and finance-savvy
Buying Financial Products Online
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- Key points
- Over two thirds have bought a financial product online
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- Figure 15: Buying select financial products online, May 2011
- Still more room for growth
- One online purchase is likely to lead to several others…
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- Figure 16: Number of financial products bought online, May 2011
- …but this has been mostly limited to straightforward products
- Who’s already buying online?
- Who’s considering buying financial products online?
- Who is most open to buying more complex products online?
- Pensions
- Mortgages
- Investment products
- As adviser numbers shrink, more distribution will move online
Contactless Card Ownership and Usage
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- Key points
- A significant amount of people still do not have a contactless card…
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- Figure 17: Level of ownership and usage of contactless debit and credit cards, May 2011
- …but most people who have one, are using it
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- Figure 18: Level of usage of a contactless debit or credit card among people who have been issued one, May 2011
- A young, male London-centric user-base
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- Figure 19: Ownership and usage of any contactless payment card (debit or credit), by select demographics, May 2011
Attitudes towards Contactless Cards
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- Key points
- Chip and PIN just fine thank you
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- Figure 20: Level of agreement with statements about contactless cards, May 2011
- Easing security concerns
- Many cardholders are looking for more opportunities to use contactless
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- Figure 21: Agreement with attitudes towards contactless payment technology, by ownership of contactless credit or debit cards, May 2011
- Limited contactless payment acceptance by retailers
- Interest in the technology is mainly linked to age and gender
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- Figure 22: Agreement with attitudes towards contactless payment technology, by demographics, May 2011
Mobile Banking Usage
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- Key points
- Monitise is the key provider of UK mobile banking services
- Proportion of people using mobile banking nearly doubles in 2011
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- Figure 23: Use of mobile banking services, 2010 and 2011
- Text-based mobile banking still number one
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- Figure 24: Number of financial services used on mobile phones, May 2011
- Figure 25: Use of mobile banking services, by ownership of selected types of technology, May 2011
- The rise of mobile applications
- 16-34s form the core group of users
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- Figure 26: Use of mobile banking services, by gender and age, May 2011
- Affluence and income are less significant factors
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- Figure 27: Use of mobile banking services, by socio-economic group, May 2011
- Figure 28: Use of mobile banking services, by gross annual household income, May 2011
Attitudes towards Mobile Banking
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- Key points
- Most consumers lukewarm about mobile banking…
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- Figure 29: Level of agreement with attitudinal statements towards mobile banking, May 2011
- …but uptake of online banking proves this could change
- Putting the focus on practical uses
- Smartphone growth = mobile banking growth
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- Figure 30: Agreement with attitudinal statements towards mobile banking, by ownership of selected types of technology, May 2011
- Level of interest directly linked with age
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- Figure 31: Agreement with attitudinal statements towards mobile banking, by demographics, May 2011
Consumer Interest in Mobile Payments
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- Key points
- ‘Touch and go’ mobile payments now an option for Britons
- NFC technology set to become a smartphone standard
- Most consumers not taking an ‘active’ interest
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- Figure 32: Level of interest in mobile payment technology, 2010 and 2011
- Challenges resemble those faced by contactless plastic cards
- Industry co-ordination the essential missing element
- Rising smartphone usage points to real market potential
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- Figure 33: Level of interest in mobile payment technology, by ownership of selected types of technology, May 2011
- Contactless card users provide a base to build on...
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- Figure 34: Level of interest in mobile payment technology, by ownership and usage of any type of contactless payment type (debit or credit), May 2011
- …but upgrading to NFC-enabled handsets will take time
- 16-34s and Londoners the most keen
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- Figure 35: Level of interest in mobile payment technology, by demographics, May 2011
New Media and Financial Services
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- Key points
- Most still praising or complaining via traditional channels…
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- Figure 36: Commenting about financial services provider customer services, by channel, May 2011
- …but new media have given consumers a much louder voice
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- Figure 37: Commenting about financial services provider customer services, by new media channels, May 2011
- Who’s most actively expressing their views via new media channels?
- Paying attention to the conversation and getting more involved
- First Direct leading the way in the UK
- Financial advisers also experimenting with new media
- Amex allowing US cardholders to link accounts on Facebook
- Discover incentivising Facebook friends
Identifying the Early Adopters
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- Key points
- Key target groups
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- Figure 38: Buying select personal financial products online, by target groups, May 2011
- Early Adopters (33% of sample)
- Late Adopters (23% of sample)
- Contactless Sceptics (22% of sample)
- Security Concern (22% of sample)
- Those using online banking also willing to buy online
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- Figure 39: Buying select personal financial products online, by target groups, May 2011
- Figure 40: Repertoire of financial services bought online, by target groups, May 2011
- Continued growth in online banking will lead to more online sales
- Early and Late Adopters lead the way in mobile banking…
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- Figure 41: Usage of mobile banking services, by target groups, May 2011
- Figure 42: Repertoire of financial transactions on mobile services, May 2011
- …but text-based mobile banking still the dominant form
- Interest in mobile payments highly concentrated among Early Adopters
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- Figure 43: Consumer interest in mobile payment technology, by target groups, May 2011
Appendix – Technology Ownership
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- Figure 44: Ownership of selected types of technology, by demographics, May 2011
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Appendix – Online Banking
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- Figure 45: Use of the bank branch, by demographics, April 2011
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- Figure 46: Use of online banking via a desktop PC or laptop, by demographics, April 2011
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- Figure 47: Use of online banking via a smartphone, by demographics, April 2011
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- Figure 48: Use of text-based banking on a mobile, by demographics, April 2011
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- Figure 49: Use of telephone banking, by demographics, April 2011
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Appendix – Attitudes and Behaviour towards Online Banking
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- Figure 50: Agreement with attitudes towards online banking, by ownership of selected types of technology, May 2011
- Figure 51: Disagreement with attitudes towards online banking, by ownership of selected types of technology, May 2011
- Figure 52: Agreement with the statements ‘Online banking makes managing my personal finances easier and less time-consuming’ and ‘I do almost all my banking online nowadays’, by demographics, May 2011
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- Figure 53: Agreement with the statements ‘Online banking is totally secure’ and ‘I am happy to use a provider who can only be accessed online/over the phone’, by demographics, May 2011
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Appendix – Buying Financial Products Online
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- Figure 54: Most popular selected personal financial products bought online, by demographics, May 2011
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- Figure 55: Next most popular selected personal financial products bought online, by demographics, May 2011
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- Figure 56: Most popular selected personal financial products consider buying online, by demographics, May 2011
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- Figure 57: Next most popular selected personal financial products consider buying online, by demographics, May 2011
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- Figure 58: Most popular selected personal financial products consider buying but not online, by demographics, May 2011
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- Figure 59: Next most popular selected personal financial products consider buying but not online, by demographics, May 2011
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- Figure 60: Most popular selected personal financial products wouldn’t buy at all, by demographics, May 2011
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- Figure 61: Next most popular selected personal financial products wouldn’t buy at all, by demographics, May 2011
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Appendix – Contactless Card Ownership and Usage
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- Figure 62: Ownership and usage of contactless payment card technology, May 2011
- Figure 63: Ownership and usage of any contactless payment card (debit or credit) technology, by demographics, May 2011
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Appendix – Attitudes towards Contactless Cards
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- Figure 64: Agreement with attitudes towards contactless payment technology, by ownership of selected types of technology, May 2011
- Figure 65: Agreement with attitudes towards contactless payment technology, by ownership of contactless debit cards, May 2011
- Figure 66: Agreement with attitudes towards contactless payment technology, by ownership of contactless credit cards, May 2011
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- Figure 67: Ownership and usage of contactless payment card technology, by agreement with attitudes towards contactless payment technology, May 2011
- Figure 68: Agreement with the statements ‘I am concerned about the consequences of losing my card’ and ‘Banks should only issue these cards when customers specifically request them’, by demographics, May 2011
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- Figure 69: Agreement with the statements ‘Chip and PIN technology is more secure’ and ‘Paying for items using contactless technology is convenient’, by demographics, May 2011
- Figure 70: Agreement with the statement ‘I wish more retailers offered me the option to use contactless payments’, by demographics, May 2011
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Appendix – Mobile Banking Usage
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- Figure 71: Most popular usage of mobile banking services, by demographics, May 2011
- Figure 72: Next most popular usage of mobile banking services, by demographics, May 2011
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Appendix – Attitudes towards Mobile Banking
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- Figure 73: Disagreement with attitudinal statements towards mobile banking, by ownership of selected types of technology, May 2011
- Figure 74: Usage of mobile banking services, by agreement with attitudinal statements towards mobile banking, May 2011
- Figure 75: Agreement with the statements ‘Mobile banking is too much of a security risk’ and ‘Being able to manage my finances on the go would make my life easier’, by demographics, May 2011
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- Figure 76: Agreement with the statement ‘I don’t really see the need for these services’, by demographics, May 2011
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Appendix – Consumer Interest in Mobile Payments
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- Figure 77: Level of interest in mobile payment technology, by agreement with attitudes towards contactless payment technology, May 2011
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- Figure 78: Level of interest in mobile payment technology, by demographics, May 2011
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Appendix – New Media and Financial Services
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- Figure 79: Praising financial firms, by channel, by demographics, May 2011
- Figure 80: Praising financial firms by channel, by demographics (continued), May 2011
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- Figure 81: Complaining about financial firms, by channel, by demographics, May 2011
- Figure 82: Complaining about financial firms, by channel, by demographics (continued), May 2011
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- Figure 83: Neither praising nor complaining about financial firms, by channel, by demographics, May 2011
- Figure 84: Neither praising nor complaining about financial firms, by channel, by demographics (continued), May 2011
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Appendix – Identifying the Early Adopters
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- Figure 85: Attitudes towards online banking, by target groups, May 2011
- Figure 86: Attitudes towards mobile banking, by target groups, May 2011
- Figure 87: Attitudes towards contactless payment technology, by target groups, May 2011
- Figure 88: Ownership of selected types of technology, by target groups, May 2011
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- Figure 89: Ownership and usage of contactless payment card technology, by target groups, May 2011
- Figure 90: Commenting about financial provider customer services, by target groups, May 2011
- Figure 91: Target groups, by demographics, May 2011
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