IFF launches ‘Bright Ideas’ Financial Services insight portal

IFF’s Financial Services team have launched a new central insight portal hosting exclusive, downloadable research papers, webinars and blogs informed by work that has been carried out through IFF’s Fintech Beacon and our own research across the broader financial sector. Having shared these findings at conferences and seminars throughout the summer, the team are now giving banks, fintechs, investment companies and other financial service organisations access to papers covering the following areas:

  • A new normal: Customer experience in financial services
  • Building and maintaining trust in financial services
  • Digital consumers shine a light on future pension needs
  • The opportunity for banks to engage with the new millennial business decision makers
  • Understanding the new impact saver and investor
  • The role of robo-advice in the investment market
  • Understanding the changing world of a financial adviser

The ‘Bright Ideas’ portal also hosts a 20-minute webinar with the latest insight from our Fintech Beacon community. To learn more about Fintech Beacon click here

Access IFF’s ‘Bright Ideas’

Follow the link here to access IFF’s ‘Bight Ideas’ portal and subscribe to our mailing list for monthly updates with news, opinions and exclusive insights.

 

 

 

IFF’s Financial Services department remains open for business over the August holiday period and would be delighted to discuss any of the above in more detail.

Email Georgina Clarke for details georgina.clarke@iffresearch.com

Can effective financial decisions be made without human interaction?

Last week’s Customer Experience Financial Services conference raised some interesting conflicts around the need for human interaction versus the capabilities of remote or automated servicing within the sector. At IFF Research, this is a topic that we have been considering from many different angles, through our own research with financial consumers, businesses and financial advisers.

Key speakers on the topic of human interaction in Financial Services

Ben Chisell – Product Director – Starling Bank

In a fascinating discussion Ben Chisell, Product Director at Starling Bank shared insight into the strategy that has led to the success of this digital bank, as well as how they have created a joint account that can be set up without any human interaction – although the customers wanting to set up the account together need to be physically close to do so! This process compares very favourably to the experience Ben himself had when setting up a joint account with a traditional bank, which involved juggling the need for face-to-face branch appointments around work commitments.

Sarah Leach – Senior UX Designer – Hitachi Capital

Later in the morning, Sarah Leach, Senior UX Designer from Hitachi Capital cited psychology theories around the need for human interaction when making significant financial decisions, as emotion plays an important role when making these decisions. This suggested that digital experiences should encourage people to engage their ‘slow brain’ so they make more successful choices, rather than encouraging more spontaneous actions. You ideally need human interaction to enable this.

Neil Dodd – Associate Director – Comparethemarket.com

Meanwhile, we heard from Neil Dodd, Associate Director at Comparethemarket.com, about how his company has successfully developed an online experience which pre-empts the questions that might have previously been posed in person via a customer helpdesk, in a very clear and intuitive way. This has improved the user experience, helping customers to review options and make decisions around which financial products to select, more effectively.

Reassurance that ‘a person’ can be reached

IFF Research has explored these topics with our Fintech Beacon community, where, despite all members being active users of digital-only banking or investment services, the need for having the option of human interaction still exists.

While these customers may be attracted to digital providers due to the innovative features, appealing monetary incentives or favourable brand identities (factors engaging the ‘fast brain’) knowing they can access some kind of personal interaction if things go wrong is essential.
However, this interaction could be facilitated via online chat rather than in person or by phone – the important issue is how well the issue is resolved. This is where the new digital-only providers seem to be excelling, complemented by automated features that delight on a day-to-day basis and – over time – help build trust. These issues are covered in our recent research papers, A New Normal: Customer Experience in Financial Services and Building and Maintaining Trust in Financial Services.

Still a place for personal relationships

There are some areas where the reliance on more traditional approaches to meeting financial needs still dominates and human relationships remain at the heart of the service. The take up of digital banks and remote servicing among businesses is slow compared to the consumer market. In fact, in research conducted via our regular Business Spotlight omnibus, we found there is very low usage of the new digital banks, and even those decision makers defined as ‘millennials’ are generally not active in seeking out these new digital services. Further analysis is included within our research paper on The Opportunity for Banks to Engage with New Millennial Business Decision Makers.

Despite the development of robo-advice, there is still a question as to whether this can fully replace the benefits of engaging with a professional financial adviser in person and receiving advice that is truly tailored to your individual circumstances. However, some members of our Fintech Beacon community recognise that robo-advice removes the potential for human bias and also removes the social barriers that may exist when considering engaging a financial adviser. Some financial advisers are looking at ways to efficiently service ‘lower-value’ clients and a hybrid robo-advice based offer is a potential solution. Financial advisers themselves are typically now serviced remotely by product and platform providers, so maybe it’s only a matter of time before they move to servicing their clients in this way too?

An ongoing issue – but what does the future hold?

This brings us back to whether big and important financial decisions can and should be made without any human interaction. There is certainly increased engagement with digital-only financial services and, so far, most are delivering a very positive customer experience. However, will these providers ever totally take the place of financial relationships that are routed in human contact? This is one of the ongoing issues that we are researching with our Fintech Beacon community.

If you would like to read any of our research papers, please click here to see the full list and download any that are of interest. Alternatively, if want to know how you can conduct your own cost effective research with our Fintech Beacon community or draw on our broader financial services expertise, please contact us:

Email: financialservices@iffresearch.com

Tel: 020 7250 3035
Georgina Clarke, Director

IFF’s experienced team experience the FS Customer Experience conference!

IFF’s Financial Service team arrived bright and early at this year’s Financial Services Customer Experience conference, eager to unveil an exhibition stand bursting with exclusive insight from the fresh and innovative research they have been conducting in this space over recent months.

The team were front and centre for those arriving at the fantastic One America Square with the exhibition floor featuring remnants of an original Roman wall that once ran through the entire city, a location marred in history for an event celebrating innovation and customer experience excellence. IFF’s Alistair Kuechel, Georgina Clarke and Chris O’Brien greeted delegates with a welcome pack containing thought pieces on everything from digital banking and robo-advice to engaging millennial business decision makers, informed by insights and opinions from IFF’s Fintech Beacon community and other research. This was complemented by some gifts and treats to go along with the morning coffee.

A new reality in customer experience

The delegate list and line up was made up of a mix of traditional and digital organisations operating on the financial services space, all eager to share and learn about the latest trends and approaches to improving customer experience. Presentations were delivered from some of the industry’s leading players including Starling Bank, Comparethemarket.com, Coventry Building Society, British Business Bank and UBS Wealth Management.

Anthony Scammell of Old Mutual Wealth opened the conference by speaking about the potential of data, a treasure trove of information the industry is perhaps guilty of underutilising but understandably cautious of exploring with recent GDPR regulations and scandals of ‘data abuse’. He also noted that organisations cannot only rely on delivery via technology as there are segments of customers (e.g. older age groups, vulnerable customers) that have to have the option of engaging with financial services through alternative channels – an issue high of the agenda of the regulator.

In terms of new technologies and approaches to facilitate improvement in the customer experience, talk of AI, automation and online platforms made us feel as if the possibilities could be endless. In line with this theme, IFF’s stand included free virtual reality headsets for people to experience an immersive world. IFF’s Financial Services team are at the forefront of research in the fintech space and will continue to explore the possibilities on behalf of those looking to break the mould and go the extra mile for customers.

Customer experience perfection

It can be difficult to perfect the customer experience. Some customers’ trust, like the Roman wall, may end up in disrepair, but with financial organisations adopting a new, innovative customer-centric approach, with fresh and enthusiastic ideas, it looks like a brighter future is on the horizon and IFF’s expert Financial Services research team are on hand to help guide the way.

The Role of Robo-Advice in the Investment Market

Consumers are engaging with new digital banking providers for a range of reasons, from the perception that they are ironically more ‘human’ and ethical than the traditional banks, to simply wanting to find an easy and efficient way of managing their money. These digital financial consumers are also very interested in Open Banking and appreciate the benefits it can bring, with concerns about sharing their data being less of an issue.

Digitally minded with traditional values

When it comes to use of robo-advice, appeal varies and some more traditional views remain apparent among this digitally savvy segment of the population. We explored some of the preferences, barriers and perceptions of the different types of financial advice among our Fintech Beacon community to understand how and why attitudes vary. Our members include customers of digital only banks and robo-advice based investment services – around half of them use both types of products.

When asked whether it would be beneficial for them to take professional financial advice, most of our digital financial consumers acknowledge they would. This is also what we would expect to hear from the general consumer population. However, the expectations for this advice differs considerably among our digital users, particularly in terms of the acceptable channel. Unsurprisingly the initial expectation is that ‘professional advice’ is delivered by a person, but other channels would be considered.

Advice is a must for complex financial decisions

As we know, major life events drive the need for financial planning and for products perceived to be confusing, such as pensions and mortgages, specialist advice is favoured. Our digital financial consumers are no different, just perhaps more open to considering a remote or automated approach.

However, even among this audience who are comfortable with technology, many expect professional advice to be delivered on a one-to-one basis and would opt for face-to-face advice if they had the choice. Especially among older customers, where financial needs are becoming more complex so there is a preference to receive the advice in person, or via a telephone conversation as minimum.

“I have taken financial advice in the past, and would do so again if necessary. It is beneficial for specialist topics such as tax and inheritance planning, where their specialist knowledge is required. I prefer to take advice face-to-face, or by telephone.”

Male, 40-49, Starling Bank customer

Online interaction is the norm

As we would expect, for some of our digital financial consumers, there is a strong preference for online interaction or an app based advice service, primarily due to the convenience. They are comfortable managing existing banking and or investment services in this way, so it’s natural to interact with an adviser this same way. This digital advice is more acceptable where needs are fairly basic and many of our younger investors acknowledge their level of investment may not make them an attractive customer for advisers. Awareness of the cost of professional financial advice is also apparent and digital services are obviously the cheaper option.

“An app or online would be perfect for me as I’m always short on time. It would be handy to know areas where I waste money and ways to save/make my money work better for me.”

Female, 30-39, Plum customer

However, some of our older consumers are also open to using robo-advice for more significant decisions, such as retirement. The idea of ‘robo-advice’ delivered online or by an app is appealing, again due to convenience and speed.

“I think when it comes to retirement professional advice is essential…My preferred choice would be online followed by an app. [Robo-advice] would be the ideal thing for me. I would want to do my research on the company I chose.”

Male, 50-59, Atom customer

Can robo-advisers gain trust?

Despite general confidence in digital financial providers, the issue of trust remains an important consideration for both in person and automated advice. Like many financial consumers, initial background research into a provider and developing a relationship over a period of time are essential for building this trust – which is true for both remote and in-person relationships. Although these customers are already using a range of digital banking apps, there is often some concern about the security and trustworthiness of robo-advice based investment. Receiving actual advice on financial matters must be from a trusted source, so new digital providers need to build this trust, which starts from offering a reliable, effective and secure service.

“If I were to arrange something, it would definitely be a face-to-face meeting (I would probably want to take in paperwork etc) and I’d have to feel that I really trusted them before we could have a meaningful chat.”

Female 30-39, Moneyfarm customer

“I love apps and digital banking for day-to-day use but I think for financial advice I would prefer face-to-face interaction. But if it were from an app that I used regularly and trusted maybe that would be different.”

Female 21-29, Nutmeg and Moneybox customer

“I think that security is an issue. I would try automated services in a small way to begin with until I had built up my own trust with the systems.”

Male, 40-49, Revolut customer

Advantages of robo-advice

There is still a degree of scepticism surrounding the financial advice industry, specifically among those that do not currently have an adviser relationship. This is generated from the ‘pre-RDR’ world where advisers were perceived as hungry sales people, whose advice was influenced by the commission they received from the providers. This perception presents an opportunity for robo-advice providers. There is some recognition among our digital financial consumers that the use of automated solutions, particularly with regards to investment advice, removes any potential human bias that may exist with traditional advisers.

“I know that studies show that things like the stock market are a gamble and the idea that people have expertise is a bit of a fallacy. Automated things might take out human failures.”

Female, 21-29, Monzo customer

Robo-advice also has appeal for social reasons. The majority of financial advisers are male and over 50 years of age and, although this profile represents experience and knowledge for much of their target audience, it presents a barrier for many potential customers. Robo-advice has the potential to a deliver consistent, direct and unbiased service, without the social barriers which may deter consumers who could benefit from the advice.

“Automated advice, presuming it was correctly calibrated, could be much better here as robots shouldn’t be sexist or patronising, nor will they waste my time with ingratiating small talk or stress me out with ‘hard sell’ pitches”.

Female, 30-39, Nutmeg customer

Limitations of robo-advice

However, there is a strong awareness of the limitations of robo-advice. The main concern – and probably a justifiable concern – is that the advice offered would always be too generic.

“I think automated financial advisers like Nutmeg or Wealthify provide generic advice, which does not work for all individuals. If their advice can be customised to a very fine degree catering to each individual, it will be more useful.”

Male, 30-39, Atom and Wealthify customer

“Automated financial advice would be appropriate for things like recommending a portfolio based on criteria I specify, or finding a suitable insurance policy. A benefit would be finding investments or policies that I would not otherwise be aware of, saving time and effort. My concern would be that robo advice would not be able to factor in specific circumstances and nuances around tax, inheritance etc.”

Male, 40-49, Starling Bank customer

The advice offered from a professional adviser is perceived quite differently from the type of robo-advice offered through investment app like Moneybox. By some users it may not be seen as advice at all. But after all, it is very different. These apps may look at what you’re spending and automatically determine what should be invested. They may determine your risk profile and suggest a suitable portfolio of funds. However, they are not yet able to deliver the full financial planning that an adviser can offer, nor recommend what those approaching retirement should do with their DC pension pot, considering their individual circumstances.

A positive future

Robo-advice is some way from delivering fully tailored financial planning. But is this an issue? We have all heard of the ‘advice gap’ which has evolved post RDR, as financial advisers are generally only willing to service those with a significant level of wealth (typically at least £50k) and banks, in the main, are steering clear from offering advice. The fact remains that consumers, even those that are digitally savvy, are generally disengaged from making significant financial decisions. They want someone – or something – to tell them what they should do.

Robo-advice based apps are helping people make small but positive changes to their saving habits and providing a way to enable people to start investing. This can certainly only be a good thing and as technology and consumer confidence evolves, these initial robo-advice services are potentially paving the way for a future where everyone can access appropriate financial advice in a way that is best suited to their needs.

This research was conducted via IFF’s Fintech Beacon community and is based on findings from 20+ participants who took part in research activities between November 2017 and January 2018.

If you would like to discuss this topic in more detail or learn more about IFF’s research offering and financial services experience, please contact us:

Email: financialservices@iffresearch.com

Tel: 020 7250 3035

Website: www.iffresearch.com

IFF Research is sharing research insights hot off the press at the Financial Services Customer Experience conference

Delivering a positive customer experience, across all areas of financial services, is more important than ever. Customers now have more ways to engage, more brands to consider and more innovative products to research, in order to find the best solutions to meet their varied financial needs.

Here at IFF we have been conducting a great deal of research – through our own Fintech Beacon community and other projects – to understand what is motivating different financial audiences (including consumers, SMEs and financial advisers) and discover what they are looking for from providers. Our research demonstrates that customer expectations are high and, in order for trust to develop and be maintained, new services must be innovative, flexible and consistent.

We are very excited to have an exhibition stand at the Financial Services Customer Experience conference on 27th June 2018 at One America Square, London. Here we will be sharing some of our research papers on a range of hot topics, including the role of robo-advice, social saving and investing, digital banking and innovation in pensions. Our expert Financial Services team will be available to discuss any research questions or challenges you may have.

We are also offering our guests £150 off the ticket price – simply quote ‘IFF Research’ under ‘ID Code’ when booking online at https://www.financialservicesconference.com

If you can’t make the conference and would like to discuss any of these research topics, we’d love to hear from you:

Email: financialservices@iffresearch.com

Tel: 020 7250 3035

Georgina Clarke

Director

What is the best way to approach qualitative research? Is it time to get “Back to Basics”?

I’m not referring to early 1990’s Conservative policy or to a legendary club night in Leeds – although arguably both deserve a discussion in their own right (watch this space!) No, I’m thinking about how we, as researchers, design and use qualitative research, a question I found myself asking after a recent chat with a stakeholder from a business we have been working with recently.

For this particular client, we were tasked with moderating several group discussions with consumers on a relatively complex financial subject matter. It was clear we’d need to spend some time warming up the group to achieve a dynamic where individuals could provide the insight we required to meet the research objectives. In this regard the Tuckman model of group development offered an excellent framework underpinning design of the session – understanding that at each stage we need to be aware of whether the group is forming, storming, norming or performing. It’s only in the latter stages of a group that we can truly answer the research objectives – i.e. when they are norming and performing – collaborating and undertaking the tasks and exercise we set them.

Setting the foundations: New and exciting vs. tried and tested

On this research study our client was very keen to engage wider stakeholders in the business with the research and as such asked us to include as many “new and exciting” qualitative techniques as we could in the group. It’s fair to say some of my “tried and tested” warm up exercises (including ‘shout-out’ flip charts or ‘jot-down’ post it notes) were viewed to be too traditional and we were pushed to make things “a bit more interesting” for their internal stakeholders.

At this point, we pushed back, our job as an independent agency is ultimately to ensure the design of qualitative research will enable us to fully answer the research objectives. Through 17 years’ experience of moderating groups I knew, if we were to skip some of the initial warm up/traditional exercises we wouldn’t achieve the group dynamic required (we’d effectively risk the ability of our groups to form and storm; prerequisites to effective norming and performing).

Focus on quality and don’t forget the principles

The groups were very successful and at the end of the first evening’s groups, reaching for a much-needed coffee I struck up a conversation with the senior customer within the clients’ business. They were clearly excited by what they had seen, and explained how it was “just so useful to see real people talking – telling us what we suspected was the case but just didn’t know for sure”. This conversation, gave me further confidence in what I have always suspected – the way to engage senior stakeholders within a business is not simply to sell “quirky” or “exciting” methods – but to provide them the opportunity to view high quality, well designed research.

Don’t get me wrong – I’m open minded and am always open to try new techniques whether it be in a group environment or through other qualitative methods. Indeed, our Fintech Beacon does just that – offering an innovative way to engage with early adopters of new FS products and services.

However, when designing an approach, it’s always useful to take a step back – go back to basics if you will – in order to ensure research objectives are met. If this primary objective is met, it follows that stakeholders should be naturally engaged with the process.

Alistair Kuechel is one of IFF’s most experienced moderators – regularly moderating groups and workshops among consumers and businesses for our FS clients.

Digital consumers shine a light on future pension needs

Pensions are not considered at the vanguard of technological innovation. Much of the industry focus has been on digital banks, investment and wealth management services. However, there are now greenshoots of growing innovation within the sector focussed on how fintech may be able to help consumers save and plan for their retirement.

To get a better sense of what consumers want for the future, we asked our Fintech Beacon research community how they were currently planning for their retirement, and what services would be really useful to them in the future. The Fintech Beacon community provides a bellwether for the industry, to offer direction on the digital services that are needed for the future.

This is a group that is engaged in, interested in and actively using new digital financial services. However, this does not always extend to an interest in retirement savings and planning. Pensions remain opaque for many and there can still be a high level of disengagement. There remains a sense across age groups that pensions are too complex, beyond their understanding and boring.

“I’m not [saving for retirement]!!! I never have. I’m starting to get worried about it now, but not enough to start saving. My employers do a pension but I haven’t put money in. I don’t know much about pensions.”

Age 30-39, digital bank customer

In addition to this, the majority of retirement saving among this group is done via a workplace pension. This additional degree of separation, having an employer arrange the pension rather than managing it themselves, means that even financially engaged consumers do not have a clear idea of how much is in their pension, nor what this would translate into in terms of income.

“My pension is managed by my employers choice of pension handler and I do not really keep an eye on it. I have seen instances of a friend who manages their pension via their banking app which is really useful and I would be interested in this platform, and visualise my pension and maybe have a date / fluctuating timeline when I could retire.”

Age 21 – 29, robo-advice & digital bank customer

These are barriers that the industry has been facing for years. So where can fintech fit in to address these issues, and what are the key things that consumers need?

1) A consolidated view
It used to be that workers would stay with a single employer for a long time. This is no longer the norm for consumers, and now even younger workers have moved employer multiple times over a relatively short time, and therefore accrued multiple pensions. With multiple DC pensions, consumers feel they are losing track of where their money is, as well whether their funds are making money. There is a strong desire not only for a consolidated view of their pension values (hopefully addressed soon by the upcoming Pensions Dashboard), but for some a desire to consolidate their various DC pensions into one pot, accessible via an app. By doing this, digital consumers will feel in greater control of their savings, and therefore more able to plan for their future.

“I consolidated a few very small pensions into PensionBee, and now use this account to make monthly and ad hoc payments into my pension. I couldn’t tell you much about the underlying fund (not because that information is not available – more that I don’t know how to compare that information to any alternatives). I think it’s held with BlackRock but honestly I don’t know much about it, or how it will perform.”

Age 30 – 39, roboadvice customer

 

“I’ve had a few from different employers so it’d be great if there was an easy way I could consolidate these schemes. I have no idea what’s going on with my pension to be honest so an app would be amazingly beneficial”

Age 21 -29, digital bank customer

 

“I also have some dormant accounts from previous employers and one my parents set up. I’d like to combine these all but it seems like a challenge. I’d really like a better way of doing this online, as to be honest I am much more comfortable with the online interface, rather than paper forms and post etc.”

Age 21 – 29, digital bank customer

2) Access, updates and education
Digital consumers feel that having greater access to their pension funds, whether this is simply understanding the current values or actually selecting funds and risk levels, would be of benefit. This audience want to have instant access to their pension values, as they would for a digital current or savings account. The expectation is now that this information should be accessible to them whenever they want it. However, there is also an acknowledgement that they do not truly feel like they fully understand pensions. If companies decide to provide digital app-led access to pension investments, it will be essential to provide information and support within an app to ensure users understand the implications of any changes they make, but also feel informed enough to make decisions.

“I would like to have more control over managing pension funds so that I should be allowed to choose risk appetite and quality of investment that my pension fund offers to me. I am also open to using a robo-investment provider after due diligence.”

Age 30-39 robo-advice & digital bank customer

 

“For me and my own pension fund I think access and a way of managing the money through an app would be very useful. I think people find pensions very confusing and a little off-putting, and an app or website that explained pensions and made accessing and managing them a bit easier would be great.”

Age 21-29, roboadvice customer

3) A socially aligned pension fund?
We have identified different ‘personas’ within our community, noting how the transition to digital-only providers has been motivated by a variety of factors. One of these key personas shows a strong tendency towards ethical, socially mindful businesses. Not only this, but some community members are interested in the sphere of social savings and investments, and would consider extending this further to include putting their retirement savings into a socially beneficial fund. Providers should be aware that the consideration of the social impact of investments is growing, and that some digital consumers now feel this is an important factor. Providers should be careful not just to feel decisions will be based on traditional risk / return trade-offs.

“I would prefer it to be in an ethical fund, but I don’t know how viable that is at the moment.”

Age 30 -39, robo-advice customer

4) Not just the young requiring support
Is it not just consumers within the accumulation phase of their retirement saving that want to have a closer grip on their pensions. Those approaching retirement, and transitioning into retirement, are in need of greater guidance than they are currently receiving. From our Retirement Choices research we know that many feel unclear about the best choices to make for using their retirement saving, and that they are doing a great deal of self-directed research online. There is a clear opportunity for providers to start engaging with their customers digitally about the different options available to them. This could be as simple as providing information within an app, triggered by life-stage, or trying to transition customers into a more interactive discussion about their options via telephone or webchat. It will be important that this critical phase the retirement journey is catered for within a digital service, especially if companies want customers keep their customer’s engagement once they are decumulating their funds.

“Yes, retirement is a big thing for me at the moment – the dreaded time is looming up on me!! Sorting out my private pension is my priority this year. I am currently trying to manage it myself but with all the changes that have been made available to pensions since 2014, I am finding it impossible to decide how to proceed! The likes of robo-investment providers are all new to me and I need to seriously look into these as a way forward! Anything that is simple and easy to manage with low fees would suit me down to the ground.”

Age 60+, digital bank customer

The opportunity for providers and new entrants

There is a clear opportunity for pension providers and new fintech companies to develop apps that meet the current consumer needs of consolidation, speed, education and ongoing guidance. In tandem with this there is great potential to leverage new open banking legislation to provide retirement savings nudges at key life stages, provide normative benchmarks on pension savings for people on similar incomes, and generally increase engagement with pensions to ensure consumers have set aside enough funds for their retirement. UK consumers need to increase their pensions saving to adequately meet their retirement finance needs, and IFF’s Fintech Beacon can provide a clear roadmap for companies working in this space.

If you would like to discuss using our community to conduct your own cost effective and quick turn-around research, please contact financialservices@iffresearch or speak to one of our team on 020 7250 3035.

What have smart speakers, Open Banking and a Paul Hollywood bread bin got in common?

We recently completed a short survey with our Fintech Beacon community to understand a bit more about the behaviour of today’s digital financial consumers. The community is made up of users of digital-only banks and robo-advice based investment platforms, so not surprisingly most describe themselves as ‘tech savvy’.

Early adopters of technology

When asked about the tech devices used, we found that over half (54%) of those members who completed our survey are already using a smart speaker (e.g. Amazon Echo, Google Home) in their home. It is clear that this group of consumers are engaged with new gadgets, especially those that make their life easier, more efficient and offer something more personalised.

This doesn’t stop with in-home devices either, as the key features of their ‘ideal’ financial provider include offering instant access to updates and support, innovative and sleek features, as well as delivering a tailored service, aimed at their individual needs and preferences.

Leading the way in Open Banking take up

If this is what they are looking for to support their financial lives, it is likely these types of consumers will be leading the way in the take up of Open Banking, which launched in the UK on 13th January. This initiative will give bank customers the option to share their transaction data securely with other banks and third parties, who will deliver enhanced services and benefits, through digital channels. These benefits will include having a single view of all finances and the ability to find better deals and products based on actual spending behaviour.

A study by Accenture last year found more than half (53%) of consumers said they will never change their existing banking habits and adopt Open Banking. This may be the case, at least in the early days, for the majority of regular financial consumers, who remain loyal to their traditional banks and claim concern about the security risks of sharing their data. However, among the Fintech Beacon members who participated in our recent survey, the majority (83%), said they were either ‘very interested’ or ‘somewhat interested’ in using Open Banking. The perceived benefits centred on having access to all financial products in one place as well as gaining access to tailored offerings:

“I have lots of accounts with different banks and financial service providers, and if I could view and manage all of those accounts via one app it would make my life so much easier.”

“With so many ads and options it’s nice to know I can have clear information on products relevant to me and my financial situation in one place”

Keeping all your bread safe in one place!

So, smart speakers and Open Banking will be used by members of our Fintech Beacon in 2018, but what does the Paul Hollywood bread bin have in common with these? The answer is that it will also be used by members of our community!

In our recent survey, we asked Fintech Beacon members: “What was the most interesting thing you bought this Christmas?”  While many of the responses were technology focused (e.g. Amazon Echo, VR headsets, 3D printing pen, wireless lighting) this more functional response caught our eye. Perhaps our claim is not entirely true as it may have been bought as a gift, so they would not actually be using it themselves.

However, maybe the link between Open Banking and this bread bin is not so obscure after all. Open Banking will provide customers a secure way to manage and control all their financial activity in one place, which is not dissimilar to how this advert describes the Paul Hollywood bread bin:

“It’s not so much a bread bin as a bakery store… Paul’s made sure there’s enough room for a fresh-baked loaf, plus bread rolls and pastries too. It’s the easy way to keep your kitchen tidy and organised.”

Let’s all get baking!

How to access Fintech Beacon

If you’d like to understand more about early adopters of Open Banking, or have any other research needs in the fintech space, please get in touch to discuss using Fintech Beacon to conduct your own cost effective and quick turn-around research.

For more information please contact Georgina Clarke in our financial services team:

Georgina Clarke, Director
E: georgina.clarke@iffresearch.com
T: 020 7250 3035
M: 07715 961476

The changing shape of digital financial consumers

Until recently we would tend to associate users of digital banking and other app-based financial products with younger people, fitting a typical ‘early adopter profile’. However, following significant developments in the fintech space over the last few years, the use of such services is rapidly growing and reaching a much wider base.

IFF Research has recently launched its Fintech Beacon – a qualitative research community of engaged users of digital-only banks and robo-advice based investment platforms. Through conducting our own initial week-long online discussion forum with members, we have built an in-depth understanding of some of the emerging customer profiles that are present among this audience of digital financial consumers.

Are they all younger with the same core needs?

Our research has demonstrated that digital users come from a range of different age groups, genders and professions, with varied interests. They include students and young professionals as well as more experienced / mature savers and investors. Despite all being digital users, different financial behaviour and patterns, as well as motivations for switching to these services, are apparent.

Are they all tech savvy and digitally engaged?

As would be expected, some describe themselves as early adopters, but others feel more like amateurs. Most agree they are tech savvy and very engaged with new developments and innovations in financial services. The majority access social media, a wide variety of smartphone apps and their digital financial services on a daily basis. Unsurprisingly, 24/7 access and instant updates are very important to them.

The different ‘personas’ of Fintech Beacon

Our community members are not a homogenous group, but are motivated by a variety of factors. These include ethical values, interest in new technology and financial platforms, determination to secure themselves the best deal, as well as budgeting, financial education and the impact of brand reputation.

Meet some of our personas:

  • Typical Early Adopter – Embraces everything new and innovative and gets frustrated by inefficiency
  • Ethical Warrior – Values companies which are ethical, compassionate, with a human approach, strongly against rigid corporations, such as traditional banks
  • Expert Money Saver – Attracted by the better rates / value offered by digital providers, always on the hunt for the best deal and loyalty is not important
  • Budget Sheet Master – Loves to be organised and in control, is attracted by the detailed and efficient budgeting functionality of digital providers
  • Financial Novice – Typically Gen Z who grew up online and expects to manage everything through an app, but is new to banking and starting to learn how to manage money

How to access Fintech Beacon

If you would like to understand more about this growing consumer segment, please get in touch to discuss using our community to conduct your own cost effective and quick turn-around research.

For more information please contact Georgina Clarke in our financial services team:

Georgina Clarke, Director
E: georgina.clarke@iffresearch.com
M: 07715 961476

IFF Research launches its Fintech Beacon: How to really understand the new digital-only customer?

Unless you have been living under a rock recently, you’ll have noticed the explosion in new fintech companies across the sector. The last few years have seen numerous new start-ups entering the market, which is a trend we expect the introduction of open banking in 2018 to encourage even further.

Over the past year, IFF has been receiving an influx of briefs from a range of providers, including digital-only banks, peer-to-peer investment providers, robo-advisors, analytics and cryptocurrency fintechs. Many of these new players have developed effective, sophisticated and nimble software solutions, but now need to better understand their target customers to refine, enhance and improve the marketing of their proposition amongst receptive prospects.

As well as new entrants, there is also a clear need amongst established providers to build a better knowledge of this growing segment of customers using digital-only services, not least because many have secured or are considering partnerships with these more technologically advanced companies. At the moment few understand how customers are weighing up these different companies, and can only speculate as to why their own customers are using these new fintech services. There is some very interesting interplay between established providers and new entrants in customers’ minds, and we can already see the danger that traditional companies become increasingly commoditised, with relationships and higher-value services being snapped up by these more agile and customer-focussed fintechs.

The Fintech Beacon

To meet this knowledge gap, IFF has launched its Fintech Beacon – our new managed online community of digital-only bank and robo-advisor customers. Our qualitative community provides cost-effective access to these niche customer segments, and our wealth of financial services experience allows us to provide insights to inform and drive digital strategies for a range of financial providers.

To discuss how you can access this community to run your own bespoke research and gain deep insights from this new and growing audience, contact IFF Research’s Financial Services team on financialservices@iffresearch.com or 020 7250 3035.