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 continues to grow across the world
- The majority of online consumers have bought financial products and
services online
- Older consumers are almost as likely to buy financial services online as
younger consumers
- Insight: The online channel is increasingly important for
borrowing-related activity
- There is significant regional variation in the propensity of consumers
to borrow online
- Consumers' take-up of online borrowing facilities varies across countries
- Older searchers of online deals are more likely to convert to borrowers
than younger searchers
- The wealthier consumers are, the more inclined they are to search for
loan deals online
- The more financially knowledgeable consumers are, the more likely they
are to search out deals
- Insight: Consumers exhibit caution when searching and applying for loans
online
- Consumers prefer to apply for loans direct from a provider rather than
through an aggregator site
- Consumers do not buy exclusively on the basis of price
- Price-focused consumers are much more likely to apply for loan deals
online
- Insight: Consumers still desire human contact when searching and applying
for loans
- Consumers cite a preference for dealing with people as a key reason for
not buying online
- Financial intelligence and use of financial advice in borrowing
- Trend: Security remains a significant barrier to the further adoption of
online banking
- Criminal activity directed at online consumers is on the rise
- Insight: Many consumers harbor doubts about the safety of borrowing online
- Perceptions of safety are closely linked to previous experience of
online searches and applications
- Confidence in security directly impacts upon propensity to borrow online
- Insight: Rising dependence on online channels increases vulnerability to
attacks
- Social networking sites were compromised by hackers targeting a specific
blogger
- Three individuals have been charged with stealing 130 million credit
card numbers in the US
- Trend: Web 2.0 presents new opportunities for banks to engage with their
borrowing customers
- Social networking is here to stay
- Social media have been adopted by all sections of the population
- Insight: Banks can exploit new media to increase customer engagement
- Providers need to carefully consider how to make use of new media
- Wells Fargo transforms the internet from a liability into an asset for
itself
- CompareTheMarket.com has scored a hit with its current ' meerkat' campaign
- Insight: Providers should avoid using social media for traditional sales
and marketing approaches
- Social media can help create a more conducive environment for building
business
- Social media is a valuable tool for providers, but there can be pitfalls
- Insight: New technology enables banks to target their loan offerings more
efficiently
- BBVA has launched an innovative online service that identifies the needs
of individual customers
- Applications such as Tu Cuentas increase the possibilities for the
cross-selling of loan products
- Several banks now boast the capacity to instantly communicate online
with prospective loan applicants
ACTION POINTS
- Action point: Take advantage of Web 2.0 and social media to enhance
customer engagement
- Banks should move beyond basic sales pitches focused primarily on rate
- Use new channels as a proxy for face-to-face contact
- Exploit new technology to create a richer customer experience
- Action point: Target loan products at older consumers
- Video and social media can be used to reach this market
- Action point: Take steps to improve online security, and perceptions of
security
- Banks need to tighten up their security protocols to reassure customers
- Mobile technology can be incorporated into authentication procedures
- Greater efforts to educate and reassure the public are needed
APPENDIX
- Supplementary data
- Definitions
- Asia Pacific
- BRIC
- Europe
- Phishing attack
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
TABLES
- Table: Global internet usage, over time
- Table: Internet users per 100 inhabitants, by geographical area, over time
- Table: Purchase of financial products online, by country
- Table: Current usage of personal loans, by country
- Table: Online loan behavior and current loan usage, by country
- Table: Online loan behavior, by age
- Table: Online loan behavior, by household income (US)
- Table: Online loan behavior, by household income (UK)
- Table: Online loan behavior, by household income (Australia)
- Table: Online loan behavior, by level of financial knowledge
- Table: Direct vs. comparison site sales of online loans, by country
- Table: Attitudes to price, by whether or not have bought financial
products online, by country
- Table: Attitudes to price, by age
- Table: Effect of importance of price on driving online loan application
- Table: Reasons for not banking online
- Table: Propensity to search, but not apply, for loans online, by country
- Table: Propensity to discuss borrowing needs in person, by country
- Table: Attitudes to safety of borrowing online, by country
- Table: Attitudes to safety of borrowing online, by online loan behavior
- Table: Online loan behavior, by level of concern about safety of online
borrowing
- Table: Conversion rates for online loan searchers, by age
FIGURES
- Figure: Internet use has expanded rapidly since the mid-1990s
- Figure: Internet penetration in the BRIC markets lags behind the rest of
the world
- Figure: In nearly all markets, most online consumers have purchased
financial products online
- Figure: Personal loans are more common in Europe than in Asia
- Figure: Russian consumers are happy to search for loan deals online, but
do not apply often
- Figure: Younger age groups are much more likely to search for loans online
- Figure: There is a correlation between household income and propensity to
search for deals online
- Figure: Consumers who are financially literate are more inclined to search
for deals
- Figure: Buying loans direct from provider is more popular than buying
through an aggregator site
- Figure: Those who have bought online are more concerned about price than
those who have not
- Figure: Older consumers are least likely to be focused solely on price
- Figure: Desire for a good price is a key driver of online application
- Figure: Preference for face-to-face contact remains a key reason for not
migrating to online banking
- Figure: A sizeable proportion of consumers are reluctant to ever apply for
loans online
- Figure: In nearly all markets, there is a desire to deal with providers in
person regarding loans
- Figure: Concern over online security is the main reason driving non-usage
of online banking
- Figure: Skepticism over safety of online loan application is higher among
non-online users
- Figure: Consumers with no prior experience of applying for loans online
feel less confident
- Figure: Impact of security concerns on online usage
- Figure: Wells Fargo has embraced social media, including Twitter, YouTube
and blogs
- Figure: CompareTheMarket.com' s new campaign is a well-integrated
multi-channel initiative
- Figure: Popularity of the CompareTheMarket.com site shot up in the wake of
the marketing campaign
- Figure: Tu Cuentas from BBVA allows customers to analyze their financial
situation in a range of ways
- Figure: Barclays Bank invites consumers interested in its loans to chat
online
- Figure: RBC and NatWest have made efforts to position themselves as
friends of the customer
- Figure: Conversion rates increase in line with age of consumer
- Figure: Several providers already cater for older consumers
- Figure: Waitrose has used online video streaming technology to reach out
to consumers
- Figure: ING Direct provides comprehensive information on verifying the
validity of its website
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