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Industry Research : UK Consumers Expect More Recognition, Fairness and Reliability from their Banks
According to an in-depth, global research study – the PACE Index – released by FIS™ (NYSE: FIS), a global provider in financial services technology, British consumers identified fairness (lack of hidden fees), reliability (following through on promises) and recognition (reward for their loyalty) as three areas UK banks need to improve.
In order to win back consumers’ favour, the report concludes that banks need to better intersect with their customers’ financial lives. This means, among other things, introducing tools which help people look after their money better, issuing alerts when funds are running low and tracking of spending patterns. Consumers are overwhelmingly positive about such services and six times more likely to use an app from their bank than from another organization presenting an excellent opportunity.
Another opportunity for banks is in helping people become more financially savvy. The Index shows that 82 percent of bank customers have no form of financial advisor. Research suggests this is directly linked to what customers feel is their single biggest pain point – finding time to visit a branch. However, over a third of millennials showed interest in online financial coaching from their banks.
Martin Barber, managing director, EMEA, FIS, said: "Banks need to engage more with their customers using mobile services and apps. And the provision of personal financial management services is the perfect way to demonstrate value and provide tailored, useful services. Banks would do well to focus on younger consumers who are open to the idea, and who will become the profitable customers of the future."
"The PACE Index shows that UK banks aren’t currently providing what people want in terms of online advice and coaching in money management. The key action point for UK banks is making the move from banking to living. People are open to the idea and want help to meet their financial aspirations. Banks can fill the hole left by the absence of old fashioned financial advisors, and in doing so win the trust and future business of customers."
A Snapshot of UK Results
British banks are considered by their customers to be underperforming on the basic requirements of safety and security, with people not wholly trusting of banks to protect their money and personal identifies.
- Over 50% of all British consumers turn to financial institutions other than their primary bank for mortgages, loans and retirement planning.
- Fears about safety and security undermine banks’ attempts to get more British consumers to use mobile banking services. British consumers are still wedded to traditional banking with 50% preferring to do it in person.
- Younger people are twice as likely as the average bank customer to use mobile banking, yet even among this group only 44 percent use any kind of app.
Insights from the UK Results
- 50 per cent of consumers – and half of millennials – place their primary institution as first choice for help with buying a house.
- As many baby boomers are planning to turn to other financial institutions as are intending to remain with their primary banking provider for help with retirement planning
- A substantial number of consumers haven’t decided where to turn for financial help, suggesting a potential market to engage through communication and relevant offers.
- The vast majority – 82 per cent – of banked consumers currently have no form of financial advisor.
- A large and unsupported market that has expressed a clear appetite for their bank to support them in achieving their important financial and life goals. This creates a prime opportunity to for banks to become FIRST in the minds of their customers.
Posted by Veronica Silva Cusi, news correspondent
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Published: Tuesday, May 3, 2016