Table of Contents
Overview
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- What you need to know
- Products covered in this report
Executive Summary
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- The market
- Open Banking and GDPR combine to create new data sharing environment
- The consumer
- Current accounts are the primary point of interaction with providers
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- Figure 1: Retail banking product ownership, September 2018
- 37% consider banks to be at least somewhat innovative
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- Figure 2: Ranking of how innovative firms are in different sectors, September 2018
- Most use contactless cards but are cold to further payment innovation
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- Figure 3: Banking innovations used in the last 12 months, September 2018
- Most consumers are slow to pick up new services
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- Figure 4: Approach to new banking innovations, September 2018
- Half want to see improved security
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- Figure 5: Interest in future banking innovations, September 2018
- Open Banking still hamstrung by attitudes towards data sharing
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- Figure 6: Attitudes towards banking innovation, September 2018
- What we think
Issues and Insights
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- Innovation cannot be allowed to threaten financial inclusion
- The facts
- The implications
- Security is still the key barrier to adopting new services ...
- The facts
- The implications
- …but innovation is generally seen to be positive
- The facts
- The implications
The Market – What You Need to Know
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- Open Banking and GDPR combine to create new data sharing environment
- HSBC leads the way on the high street
Market Environment
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- Regulatory context
- Open Banking and PSD2 come into force
- GDPR provides consumers with greater control and protection over data
- Payments
- Cash is far from falling out of favour
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- Figure 7: Use of payment methods, February 2018
- Channel preferences
- Online platforms are favoured for almost all banking needs…
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- Figure 8: Channel preference in retail banking, by activity, June 2018
- …but branches remain highly valued
Recent Developments
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- FCA welcomes the fourth cohort of regulatory sandbox participants
- Open Banking launches
- HSBC leads the way on the high street
- Marketplaces point towards a fully realised Open Banking environment
- Other major brands have been slow to develop new services
The Consumer – What You Need to Know
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- Current accounts are the primary point of interaction with providers
- 37% consider banks to be at least somewhat innovative…
- Most use contactless cards but are cold to further payment innovation
- Most consumers are slow to pick up new services
- Half want to see improved security
- Open Banking still hamstrung by attitudes towards data sharing
Retail Banking Product Ownership
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- Current accounts are the primary point of interaction with providers
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- Figure 9: Retail banking product ownership, September 2018
- Consumers acquire more products with age
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- Figure 10: Number of surveyed retail banking products owned, September 2018
- Figure 11: Number of surveyed retail banking products owned, by age, September 2018
Banking Innovation in Context
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- 37% consider banks to be at least somewhat innovative…
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- Figure 12: Ranking of how innovative firms are in different sectors, September 2018
- …rising to half of under-25s
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- Figure 13: Agreement that banks are quite innovative or very innovative, by age, September 2018
- Access influences perceptions of innovation
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- Figure 14: Ranking of how innovative credit card companies are, by gross annual household income, September 2018
- Borrowers more likely to see banks and building societies as innovative
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- Figure 15: Agreement that banks and building societies are quite innovative or very innovative, by retail banking product ownership, September 2018
Innovative Banking Activities
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- Opposition to payment innovation is entrenched
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- Figure 16: Payment innovations used in the last 12 months, September 2018
- Younger consumers more likely to use payment innovations
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- Figure 17: Payment innovations used in the last 12 months, by age, September 2018
- Has mobile banking reached a plateau?
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- Figure 18: Banking innovations used in the last 12 months, September 2018
- Analytic tools have space to grow
Approach to Banking Innovations
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- Most consumers are slow to pick up new services
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- Figure 19: Approach to new banking innovations, September 2018
- Millennials are the key innovation trialists
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- Figure 20: Approach to new banking innovations, by generation, September 2018
- Contactless cards are a must-use technology…
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- Figure 21: Banking innovations used in the last 12 months, by approach to new banking innovations, September 2018
- …while Early Adopters are starting to get on board with Open Banking
Interest in Banking Innovations
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- Most can identify areas for improvement …
- …but not always areas for innovation
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- Figure 22: Interest in future banking innovations, September 2018
- Early Adopters and Early Mainstreamers show healthy interest in most innovations
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- Figure 23: Interest in future banking innovations, by approach to new banking innovations (Early Adopters and Early Mainstreamers), September 2018
- Laggards can be tempted with security innovations
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- Figure 24: Interest in future banking innovations, by approach to new banking innovations (Late Mainstreamers and Laggards), September 2018
Attitudes towards Banking Innovation
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- Open Banking still hamstrung by attitudes towards data sharing
- Two thirds think banks should walk before they run
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- Figure 25: Attitudes towards banking innovation, September 2018
- Innovation is appreciated, but concerns abound
- Even Early Adopters doubt the potential of digital services
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- Figure 26: Attitudes towards banking innovation, by approach to new banking innovations, September 2018
- Half say innovative brands have a competitive edge
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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