New research explores reasons for consumer inertia in fintech sector
New research conducted by True in partnership with Strive, to explore what’s behind slow consumer adoption of new digital financial services, has found that contrary to conventional wisdom, people are not unhappy with their traditional high street bank.
The report by True ‘Breaking Inertia: What will it take to change customer attitudes to financial services?’, included consumer research which found that 86% of people aged 18 to 55 years old rated their bank 7 out of 10 or more for satisfaction. And 58% agreed with the statement ‘there is little to be gained from switching banks’.
However, despite this finding, there is still strong market opportunity for fintech providers as other factors such as cost are still significant driving factors in consumer decision-making. Over two-thirds (69%) of those surveyed agreed ‘if a financial product offers a clear benefit I’d consider it regardless of who was offering it’. In fact, when asked the most important factor in choosing a new provider cheaper fees and charges were ranked the highest by 37% of those surveyed.
Fifty eight per cent (58%) of respondents were comfortable with the idea of big banks acquiring fintech start-ups, proving that they weren’t against technology but that disruption alone is not enough of a reason to switch to a new provider.
“The era of open banking is upon us and these findings help established incumbents and new fintech propositions understand what they can do to get people to care enough to move their money,” Tim Jones, MD True.
Other key findings in the report, which also includes qualitative research and case study material, were centred around some of the misconceptions fintech companies often build their proposition upon.
Namely, that a brilliant tech or UX interface will be a key factor in acquiring customers. This was found to be important in the report, but perhaps not given the gravity by consumers fintech companies sometimes assume. When respondents were tested on customer experience using Barclays and Starling sign up process, the majority preferred the latter experience, but were still reluctant to switch accounts. The disruptor has to provide reassurance that they are legitimate, secure and worth the effort.
Appetite for face-to-face interaction and ‘help from a real person’ should also not be underestimated by new digital providers. Sixty five per cent (65%) of those surveyed said they thought Barclays, Lloyds and other traditional banks would offer the highest quality advice, a perception attributed to the reassurance of their high street presence.
Triodos Bank is a global pioneer in sustainable banking that launched a new online current account in the UK in 2017.
“The response we’ve had to our new current account indicates that people are motivated to switch banks – they just needed a bank to reflect their values. Switchers to Triodos know that we are completely transparent about where we lend their money, and that it is working towards positive social, cultural and environmental change. People will change their behaviour, but only for things that are meaningful for them.” Bevis Watts, Managing Director, Triodos Bank UK.
To download a full copy of the report please visit: https://www.truedigital.co.uk/articles/how-can-brands-break-inertia-in-financial-services