Table of Contents
Executive Summary
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- The market
- Open banking reforms to accelerate innovation
- Consumers wary of using challenger brands
- The consumer
- Majority yet to migrate to mobile
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- Figure 1: Consumers’ usage of digital financial services, December 2016
- Most people have a limited financial ‘comfort zone’
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- Figure 2: Repertoire of consumers’ usage of digital financial services, December 2016
- Providers must educate and empower to overcome scepticism
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- Figure 3: Interest in new and potential innovations, December 2016
- Half of consumers could be persuaded to ‘opt in’
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- Figure 4: Ways of encouraging consumers to share information with financial services providers, December 2016
- Consumers polarised by physical vs digital
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- Figure 5: Attitudes towards banking channels and interactions, December 2016
- What we think
Issues and Insights
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- 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
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- Contactless payments trigger further rise in card transactions
- Digital dominates day-to-day
- Acquisitions ahead
- Open banking reforms to accelerate innovation
Market Background
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- UK still far from a cashless society
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- Figure 6: Volume of payments made in the UK, by payment method, 2015 and forecast for 2025
- Digital dominates day-to-day
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- Figure 7: Retail banking channels used to complete various activities, July 2016
- Consumers start to think ‘mobile-first’…except in financial services
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- Figure 8: Ownership of computing and mobile devices, November 2014-September 2016
- Consumers wary of using challenger brands
Regulatory Context
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- Open banking reforms to accelerate innovation
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- 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
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- Open banking APIs
- Cloud computing in financial services
- Online and mobile banking security
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- 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
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- Figure 12: Awareness and use of selected mobile payment schemes, April 2016
- Finance management apps
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- Figure 13: Money Dashboard’s mobile and desktop budgeting trackers
- The rise of AI
- Telematics
- Blockchain
The Consumer – What You Need to Know
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- 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
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- Majority yet to migrate to mobile
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- Figure 14: Consumers’ usage of digital financial services, December 2016
- Most people have a limited financial technology ‘comfort zone’
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- Figure 15: Repertoire of consumers’ usage of digital financial services, December 2016
- Latest innovations a step too far for young women
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- Figure 16: Consumers’ usage of digital financial services, by gender and age, December 2016
- Opening the financial floodgates
Interest in New Innovations
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- Providers must educate and empower to overcome scepticism
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- Figure 17: Interest in new and potential innovations, December 2016
- WhatsAppening with my investments?
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- Figure 18: Interest in new and potential innovations, by generation, December 2016
- Young affluent consumers most interested in robo-advice
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- Figure 19: Interest in innovative services – CHAID – Tree output, December 2016
- The FinTech-savvy crowd will value aggregation
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- Figure 20: Interest in account aggregation services, by repertoire of consumers’ usage of digital financial services, December 2016
Attitudes towards Data and Security
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- Nearly half of adults believe mobile banking is risky…
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- Figure 21: Attitudes towards data and security, December 2016
- …though users are less afraid
- FinTech users most open to personalisation
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- Figure 22: Attitudes towards sharing personal data, by repertoire of consumers’ usage of digital financial services, December 2016
Incentivising Information Sharing
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- Half of consumers could be persuaded to ‘opt in’
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- Figure 23: Ways of encouraging consumers to share information with financial services providers, December 2016
- Millennials most open to data sharing
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- 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
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- 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
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- Consumers polarised by physical vs digital
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- Figure 26: Attitudes towards banking channels and interactions, December 2016
- Generations apart
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- Figure 27: Attitudes towards banking channels and interactions, by age, December 2016
- Half of consumers only want essential communications
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- Figure 28: Attitudes towards banking channels and interactions, December 2016
- Digital channels favoured where possible
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- Figure 29: Attitudes towards banking channels and interactions, December 2016
- Experience breeds financial confidence
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- Figure 30: Attitudes towards banking channels and interactions, December 2016
Online Banking Preferences
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- Nearly a third of consumers want significant upgrades
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- Figure 31: Attitudes towards online banking sites and features, December 2016
- Majority wary of sharing transaction data
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- Figure 32: Attitudes towards online banking sites and features, December 2016
- One in three people keen to use alternative login methods
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- Figure 33: Attitudes towards online banking sites and features, December 2016
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Methodology
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- Figure 34: Interest in innovative services – CHAID – Table output, December 2016
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