New findings from VMware show almost half of UK consumers prefer to engage with banks via apps rather than in person, while two-fifths believe their smartphone is more important than their wallet in powering financial transactions.
The new study, of more than 2,000 UK consumers, exposes the extent to which the digital-first, customer-obsessed mantra that was ushered in by the fintechs and Challenger Banks, has transformed the customer battleground.
However, while most industries underwent a seismic digital switch as a result of the pandemic, the Financial Services industry has not matched the level of innovation. Less than one-third (30%) of consumers believe the Financial Services firms they interact with now deliver an improved digital experience compared to before the pandemic.
In a market beset with challenger brands looking for ways to uproot the incumbent providers, this research should serve as a wake-up call to Financial Services firms looking at ways to instil brand loyalty. Over half of consumers would switch to a competitor if their digital experience doesn’t live up to expectations – just 10% would remain loyal.
The areas of investment that will best serve both traditional and challenger firms alike are clear. While there remains an insatiable appetite for better digital services in Financial Services, the absolute priority for 74% of customers when choosing a new provider is security. This unsurprisingly is played back when customers reveal what more they want from their digital interactions, which include a high level of security and protection of their data (70%), simple and effective applications (47%), and ease of use across all their devices (40%)
Matthew O’Neill, Industry Managing Director, Advanced Technology Group, VMware said “After the unprecedented but overdue ‘digital switch’ of last year, consumers are rightly demanding more from an industry where the battle for the best customer experience means success or failure to businesses in the Financial Services sector. In this new battleground, the most successful firms will be the ones that are becoming digital at the core – where they can adapt and innovate faster to create better user experiences, without compromising security, in the process. Those firms who have a digital-first posture, have everything to play for with today’s consumers and not just those that are growing up digitally native.”
The Financial Services firms that will thrive in this new customer battleground will ultimately be those that can establish themselves as a trusted, digital partner. It will also prove a key success factor in the roll-out of more innovative products and “smart” services. For instance, while today, if customers had money to invest, just 12% would allow an app to make the investment decisions over an individual that works for the bank, It is those firms that can put trust and transparency front and centre of their offering, that will have the opportunity to capture this lucrative opportunity.