Consumer Survey 2017 presented by The Telegraph

“What consumers really think”

ContentsIntroduction 2

The UK consumer: financial profile and habits 3

Banking services used 4

London vs the rest of the UK 5

What do consumers REALLY think of fintech? 5

Fintech has penetrated the London market 6

Conclusion 7

About The Telegraph Future of Fintech conference 8

Introduction

The Telegraph are delighted to present our first fintech-focused consumer survey, aimed at placing a spotlight on what consumers really think when it comes to their financial services, and how that mindset and behaviours impact fintechs.

The fintech industry is a fine adornment to UK financial services. Home to success stories like Transferwise, Nutmeg and Atom Bank to name a few, it has received estimate valuations in excess of the $1 billion mark. Yet the rate of adoption of fintech services by consumers or businesses is well behind the hype. Following the meeting of the advisory board for The Telegraph Future of Fintech conference in early 2017, it became clear that there’s sometimes a risk of fintech professionals only speaking to their peers, and an echo-chamber effect leading to a potentially inflated sense of success…

With this in mind, The Telegraph decided to collect consumer opinions and find out for itself how the public really view fintech – or if they have an opinion at all. The Telegraph Future of Fintech Consumer Survey 2017 highlights are detailed in this report, and we hope it provides its readers with a greater insight into prospective customers. If nothing else, we hope that it informs, and brings another dimension to the discussion – avoiding the dreaded ‘bubble’ effect that takes place in some industries.

Jeremy Warner Associate Editor The Telegraph

85%of account holders

bank with the big five

Q2 What is most important to you about a financial service?

Trust is still king. Reliability is one of the main criteria for consumers when choosing a bank, but ease is queen.

Reliability/trust 46% Ease of use 28% Service 16% Financial incentive 7% Prestige 2% Other 1%

Base: 450 (all who own a current account)

Base: 500 (all respondents)

46%Reliability/ trust

Q1 With which of the following banks/providers do you hold (a) current account(s)?

The high street brands still dominate the current account market – with 85% of account holders banking with the big five.

19% 18% 17%

16% 15%

The UK consumer: financial profile and habits

KEY FINDINGS

Five banks serve the majority of the UK consumer market

Reliability/trust is still the main criteria for choice of bank

The current account market is essentially saturated

Take up of insurance products lag behind current accounts and credit services

Busting the ‘cashless society’ myth: 1 in 3 respondents use cash daily and 3 quarters do so weekly; while 1 in 10 don’t have a current account

Security is not the deterrent to online banking that may assume it is

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1234 5

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Banking services used

Q3 Which of the following financial product(s) do you currently hold?

3%

24%

26%

29%

34%

37%

48%

57%

59%

90%

None of these

Life insurance

Travel insurance

Mortgage

ISA

Pension

Building /Content insurance

Credit card

Saving accounts

Current account

Base: 500 (all respondents)

Q4 How do you primarily access your banking services, on the following occasions?

50% of new products and services are applied for online (38%) or on mobile (12%).

38% 12%online mobile

Base: 500 (all respondents)

Security concerns are not a major deterrent… In fact mobile banking apps are seen as easy, quick and secure.

Q5 How frequently do you use the following payment methods?

Cash is still big, mobile and wearables are slowly growing

Londoners are likely to use tech – but don’t forget the rest of the UK

Wearables are not winning over consumers, but cheques are approaching their final days

Cheques are approaching their

final days

Not currently used

Less than once a month

Monthly

Weekly

Daily

1% 9% 15% 39% 36%

1. Cash

2% 5% 12% 57% 24%

2. Debit /Credit card

24% 9% 10% 37% 20%

3. Contactless Debit/Credit card

70% 6% 5% 10% 9%

4. Mobile/wearable technology

50% 37% 6% 6% 2%

5. Cheques

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London vs the rest of the UK

81% of respondents based in London have a current account – vs 91% for the rest of the UK

They also have fewer financial products – 3.8 on average – vs 4.1 for the rest of the UK

Barclays is more popular in London (33% vs 15%) and their international presence is important

Cash is still used daily by 40% of Londoners and 33% use it weekly

Contactless is used as much as outside of London but more frequently

1 2 3 45

What do consumers REALLY think of fintech? Only 12% of those surveyed have heard of fintech, and

7 in 10 don’t know any of the main fintech companies

Only 10% of those surveyed are currently using fintech companies

There is opportunity for fintech companies: financial incentive and user-friendly products could convince a third of non-users to switch to digital-only banks, and over a third of those surveyed would consider using a fintech product

Security is seen as the main issue with fintech companies (perception of security as a challenge is lower for retail banks)

2 in 5 would consider investing money via a fintech, but the majority would only invest less than £200 a month that way

Q6 Before today, were you aware of the term ‘fintech’?

Yes12%

Maybe /don’t know

8%

Base: 500 (all respondents)

Q7 What, if anything, is your main concern about using fintech products?

Security of your money/ investments

Protection of yourpersonal data

Cyber attacks

Lack of expertise/experience

None of these

Other

27%

18%

18%

18%

17%

2%

Base: 500 (all respondents)

80%No

N

S

Fintech has penetrated the London market

London-based respondents are more aware of fintech (27% vs 10%). 52% of those have used a fintech company vs 26% for the rest of the UK

Awareness is higher too in London with Atom bank (23%), Nutmeg (13%), Curve (8%), Funding Circle (8%) and Stripe (8%) most well-known brands

Londoners are also more likely to invest more in fintech wealth services: 16% of them would invest over £500 per month vs 4% rest of the UK and 35% would invest more than £200 against 16%

Security is however seen as more of a concern with fintech, with 35% of Londoners saying it is the main barrier to usage vs 26% for the rest of the UK

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Q8 What services or incentives would persuade you to leave your current bank to join a digital only bank?

4%

33%

22%

27%

30%

32%

33%

40%

Other

None of these

Ease of process

Speed of services

Cheaper

Ease of Use

Better services

Financial incentive

Base: 88 (all those who don’t use a fintech company)

Q9 Investment: What type(s) of services would you be interested in using?

Q10 How much would you be ready to invest using a fintech wealth management service?

Not sure

17%16%

Nothing

49%

Less than £200

a month

13%

£200-£500 a month

5%

£500+a month

Base: 206 (all those interested in investment in fintech)

Base: 206 (all those interested in investment in fintech)

16% of Londoners would

invest over £500 per month

vs 4% rest of the

UK

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29%Virtual Currency

Platforms

21%Venture/

P2P lending

30%None of these

32%Wealth

management app

33%Robot advisor

THE FUTURE OF FINTECH CONSUMER SURVEY 2017 – PRESENTED BY THE TELEGRAPH 77

Conclusion

The results of this survey, I believe, offer a number of important insights, some of them genuinely surprising, others likely to confirm what you already suspect.

This survey is a first for The Telegraph – leveraging our strength in the consumer space to inform our business audience. Based on responses from 500 people, a cross-section of UK consumers (not only Telegraph readers), the sample broadly represents the population makeup of the country.

So what have we learned? Well the bad news is that public awareness of, and trust in, fintech remains low – consumers are proving staunchly traditional. There is a way to go in engaging the consumer with what fintech can do for them and public confidence rests with the big banks to keep their money safe.

In their view, banking services must offer ease of use, definitely an opportunity for fintech. Perhaps surprisingly, financial incentives when choosing a bank don’t figure that highly, but it is a greater consideration for consumers when choosing fintech products.

More good news is that banks have persuaded customers of the safety of mobile and online – around half of respondents check balances and make transfers and payments online. This trend will no doubt continue to grow and benefit the fintech sector. However, work needs to be done by fintech to allay security concerns over personal data. People want privacy, we in the industry know fintech can deliver it, but the public are going to take some convincing.

The main message here is that despite the current lack of awareness and trust, our survey highlights the vast potential there is out there for the fintech sector, both for the incumbents in offering a better customer experience, and for newcomers in reducing the costs of finance to consumers through technological innovation. The future is certainly bright for fintech.

Jeremy Warner Associate Editor The Telegraph

4% rest of the

UK

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There is generally a way to go in engaging the consumer with what fintech can do for them, and in building trust in the innovations and products now beginning to come onto the market.” Jeremy WarnerAssociate EditorThe Telegraph

“

About The Telegraph Future of Fintech conferenceNow an annual event for senior industry leaders, The Telegraph Future of Fintech conference aims to help put fintech on the national agenda. Providing a premium platform for no more than 300 C-suite stakeholders from across financial services and fintech, the conference facilitates real discussion of collaboration, the economic impact of fintech, improving financial inclusion, as well as what it will take to ensure that London holds its dominance as a flagship global capital for investment, talent and growth.

To participate in the next The Telegraph conference event please contact Conferences@telegraph.co.uk

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