Consumer Attitudes to Online Savings

Table of Contents

OVERVIEW

• Catalyst
• Summary
• Methodology

INTRODUCTION

• Financial Services Consumer Insight: dispelling the myths surrounding online behaviors
  • Understanding consumers' attitudes towards financial services is vital for providers

THE FUTURE DECODED

• Trend: Online activity is growing globally
  • Falling technology prices and growing infrastructure are driving growth in all regions
• Insight: Online savings are now held by 43.9% of consumers with internet access
  • Japan has the highest penetration of online savings
  • All age groups use online savings, but 35 - 49 year olds account for 37% of all online savers
  • Online banking will not replace traditional methods in the eyes of savers
• Insight: Consumers registered to use online savings hold a greater number of financial service products
  • Online savers are more active in almost all savings product categories
  • Online savers also hold a greater variety of financial service products
  • Online savers tend to save more, with some notable exceptions
  • Online savers are also more likely to buy other financial service products online
• Trend: Online savers break the mold
  • Online savers key differentiator is in their attitudes and confidence regarding financial services
  • Online savers are driven by a range of concerns
• Insight: Online savers are intelligent and nuanced, and are driven by more than just budget concerns
• Insight: Online savers are comfortable making their own financial decisions
  • Online savers show a preference for free, online financial information
  • Online availability is not a top priority for online savers when making financial decisions
  • Online savers are strongly driven by liquidity concerns

TREND: MOBILE PHONE USE HAS SURPASSED ONLINE PENETRATION

• Insight: Mobile savings activity is subject to regional variations
• Insight: Mobile savings has the most potential in developing markets
• Trend: Web 2.0 is being used to push savings
• Insight: Web 2.0 draws consumers in deeper
  • Dynamic content can help enhance control and functionality
  • Social networks are already being used to drive savings
  • Social media can also prove harmful as disgruntled customers can now reach a wider audience
• Trend: Security and stability is critical to online savings activity
  • Online savers in countries with high rates of online savings show lower rates of concern
• Insight: The security and stability of saver institutions is increasingly important to online savers
  • Perceived versus real risks of collapse
• Insight: Fear of fraud is detrimental to online savings and investment activity
  • Security must be visible without becoming inconvenient

ACTION POINTS

• Action Point: Integrate online savings and investment with other forms of online financial activity
• Action Point: Move beyond price and functionality as your unique selling point
• Action Point: Use mobile banking to reach developing markets
  • The remittance market has strong potential for mobile savings products
• Action Point: Use Web 2.0 effectively and avoid technology for the sake of it
• Action Point: Security and stability measures need to be seamless but nonetheless visible
  • Education against fraud and phishing scams will help ease consumer fears
  • Provide seamless, but nonetheless visible security protocols

APPENDIX

• Methodology
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Internet penetration by region, 2000 - 2008
• Table: Internet penetration by country, 2000 - 2008
• Table: Number of internet users by region as of March 2009
• Table: Share of internet users registered to use online savings
• Table: Share of consumers by country registered to use online savings
• Table: Age breakdown of online savers, 2009
• Table: Consumer attitudes to online and branch banking
• Table: Online registration rates for online saver and non-online savers
• Table: Share of consumers with savings products
• Table: Share of consumers with financial service products
• Table: Average amount saved each month by country ($)
• Table: Share of consumers buying products by type directly from financial service providers
• Table: Share of consumers buying products by type from price comparison websites
• Table: Online registration by consumer and product type
• Table: Share of online savers by consumer type by country
• Table: Online saver, and other consumer, level of education
• Table: Online saver, and other consumer, attitudes to finance*
• Table: Current levels of concern, and future action over savings and investment*
• Table: Factors influencing online savers purchasing decisions*
• Table: Reasons for savings product purchase by share of consumers
• Table: Communication technology penetration by region (per 100 population)
• Table: Arica, mobile cellular subsriptions (per 100 population)
• Table: Level of concern over the security of online banking*, and online savings rates, by country

FIGURES

• Figure: The number of internet users globally has more than doubled in eight years
• Figure: Growth by individual countries shows the scope for growth in the BRIC region in particular
• Figure: There were 1.59 billion internet users globally as of March 2009
• Figure: Nearly 44% of consumers are registered to use some form of online savings
• Figure: Japan has the highest rate of online savings at 72.4%
• Figure: 35 - 49 year olds are the largest age group for online savings and investment activity
• Figure: Online savers feel more strongly about face to face banking than non-online savers
• Figure: Online savers are significantly more active than non-online savers in other online banking areas
• Figure: Online savers have more savings and investment products altogether
• Figure: Online savers are more active in almost all financial service product categories
• Figure: In most but not all regions online savers save more each month
• Figure: Online savers are likely to buy online direct from companies rather than from comparison sites
• Figure: Online savers are much more likely to use price comparison websites
• Figure: 59% of online savers have at least some university level education
• Figure: Attitudes to finance show online savers are more concerned about their savings
• Figure: Online savers are more likely to act on their concerns, reflecting their greater confidence
• Figure: Conscientious consumers are the most active across all types of online savings
• Figure: Due to their high volume in each market, budget consumers are the largest users of online savings
• Figure: Online savers are comfortable independently researching their savings options
• Figure: Financial stability has become the most critical factor for online savers
• Figure: Nearly half of online savers place a strong emphasis on savings liquidity
• Figure: Mobile coverage is 32 times more prevalent in Africa than fixed telephone lines
• Figure: Since 2000 mobile phone subscriptions in Africa have had a CAGR of 43 - 44%
• Figure: Real time and rich savings information can help to increase the user experience
• Figure: Smartypig has successfully added social networking to help drive savings
• Figure: Smartypig deposits are forecast to reach $500m by the end of 2009
• Figure: Social networking allows negative images to be spread as easily as positive ones
• Figure: The run on Northern Rock marked a downturn in UK saver confidence
• Figure: All consumers show some concern over the security of online banking
• Figure: Icesave explicitly showed its backing by Landsbanki in an attempt to look stable
• Figure: The professional look of phishing scams fool many online savers
• Figure: Using two-way engagement via Web 2.0 functionality can help personalize a brand image
• Figure: USAA' s advertising is explicit regarding the company' s lack of a need for a government bailout
• Figure: Messages targeted at the point of fraud are likely to have a stronger impact on consumers
• Figure: High visibility airport security helps act as a deterrent while reassuring passengers