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The future of consumer finance in the next five years

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In this document we’re concentrating on the likely impact of some sizeable socio-demographic trends, technological advances and legislative changes in the near future. …

In this document we’re concentrating on the likely impact of some sizeable socio-demographic trends, technological advances and legislative changes in the near future.

By near future we mean in the next five years, so we’re hardly crystal ball gazing, and while the outcome of these developments is obviously uncertain, we believe the RDR, social media, financial services, fs, consumer finance, viewpoint, pensions ace are already some interesting insights into what the future may have in store for tomorrow’s financial consumers.

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  • 1. Viewpoint / August 09 p.01 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics The baby boomers Ethnic diversity Increasing connectivity 3 Viewpoint Legislation RDR The pensions Act 2008 Free money guidance 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial August 09 brands do? 5 A final word Looking ahead to changes in consumer finance over the next five years
  • 2. Viewpoint / August 09 p.02 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics The baby boomers Ethnic diversity Introduction Increasing connectivity 3 Legislation RDR The pensions Act 2008 Free money guidance Welcome to the first Teamspirit Viewpoint 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial With all the ongoing turmoil in the world of financial services, it would be all too easy to get caught up in the In this edition we’re concentrating on the likely impact of some sizeable socio-demographic trends, uncertain, we believe there are already some interesting insights into what the future may have in store for tomorrow’s brands do? headlights of the present perils and technological advances and legislative financial consumers. dangers and forget about what’s on changes in the near future. We hope you enjoy reading it. And if 5 the horizon. By near future we mean in the next you’ve any thoughts of your own you’d A final word Therefore it seemed fitting to use the five years, so we’re hardly crystal like to add, please send them to us at future of consumer finance as a ball gazing, and while the outcome viewpoint@teamspirit.uk.com or call starting point for our new viewpoint. of these developments is obviously David McCann on 020 7360 7878.
  • 3. Viewpoint / August 09 p.03 1 Introduction The future, it’s all about the experience The future, it’s all about the experience The future of consumer finance Financial services in the future will need to concentrate on creating more than hard 2 facts, big numbers and mere products. Demographics The baby boomers Ethnic diversity Increasing connectivity Whether you’re HSBC or The Century They will need to create reasons to Building Society, the UK’s smallest believe, have a valued purpose and Mutual, financial institutions new promise beyond the purely functional 3 and old will need to create memorable aspects of their offer, and create a customer experiences and physical manifestation that embodies Legislation environments to ensure their the more elusive qualities of what RDR future success. they offer. The pensions Act 2008 Free money guidance Just relying on the commodity of a good rate of return and consumer apathy will no longer ensure a future. In short, financial services companies 4 are going to have to develop the Future more-intangible aspects of their What’s the future for business – their brands. financial services? Being online or digital isn’t enough What should financial brands do? 5 A final word
  • 4. Viewpoint / August 09 p.04 1 Introduction The future of consumer finance The future, it’s all about the experience The future of consumer finance As marketers we all probably feel that we’ve seen enough turbulence in the 2 past few months to last a lifetime. Demographics The baby boomers Ethnic diversity Increasing connectivity businesses were competent at Financial services have undergone So what changes are we irreversible changes and it’d be nice talking about? managing money. to have some stability, wouldn’t it? We have identified a number of The credit crunch, the nationalisation 3 But unfortunately, while recessions developments all colliding at the of banks and the subsequent recession Legislation and future government policies will same time to create this tsunami. have allowed consumers to question RDR come and go, what we’ve just These include: the very core of why they choose The pensions Act 2008 experienced in the financial markets these brands. 1. socio-demographics Free money guidance is nothing compared to the challenges 2. regulation and policy This array of well-defined that’ll continue to happen in the next 3. technology developments and distinct trends few years. are not only heading our way at All these developments are rushing 4 For consumers, intermediaries and roughly the same time, but they are towards banks and financial services providers alike, the future of consumer interdependent and heavily overlap. Future at a time when consumers have not finance is going to look a lot different What’s the future for just lost trust but have started to And over the next three to five years, financial services? from how it does now – in fact we question the very nature of what they we can expect these changes to have Being online or digital believe that we should expect a tidal once believed was true about them, a profound, lasting impact upon isn’t enough wave of change. namely that these institutions and the world of financial services. What should financial brands do? 5 A final word
  • 5. Viewpoint / August 09 p.05 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics The baby boomers Ethnic diversity Increasing connectivity 3 Legislation RDR The pensions Act 2008 Free money guidance Demographics The demographic changes 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial Demographic change 1: the baby boomers The biggest demographic change to In fact, last year saw the number of people of state pensionable age exceed the number of children in generations can expect to have longer and longer retirements. In fact for those retiring in 2012, brands do? the UK for the first time. they’ll spend on average over 20 affect the UK in recent years has been years in retirement. the growth in our ageing population. This trend is set to continue. It’s 5 In fact the fastest-growing age group estimated that by 2031 over one third The other thing to consider is that the A final word in the UK are those aged 80+ who of the total UK population will be over generations facing retirement now, currently constitute 4.5% 55. The obvious knock-on effect of won’t be anything like the retirees (2,749,507) of the total population*. this ageing population is that future of the past. *Source: www.statistics.gov.uk/cci/nugget.asp?id=2157
  • 6. Viewpoint / August 09 p.06 1 Introduction The future, it’s all about the experience The future of consumer finance 2 This up-and-coming retirement Importantly, the over-50s account for That begs the question that no matter Demographics generation are made up of the baby 80% of the UK’s wealth, which is what this expanding post-work The baby boomers boomers, the post Second World War expected to rise to 84% by 2012. generation choose to do in retirement, Ethnic diversity children who’ve enjoyed a life of However, while they have the assets just how is the state going to fund this Increasing connectivity relative comfort and ease. They’ll and the cash, in a recent poll, 63% populace if they can’t fund it demand the same from their of boomers haven’t reviewed their themselves – especially when the size retirement and will choose to lead a retirement plans as a result of the of the next generation is shrinking? fuller, more active life after work than current financial crisis and are likely 3 any previous generation. to suffer as a consequence. Legislation RDR So if you were expecting to go to the The opportunities post-work The pensions Act 2008 bank of mum and dad any time soon, Start a new career? you might be in for a shock, as they Free money guidance Volunteering? will have spent your prospective Go travelling? inheritance on a hedonistic haze Open a business? of retirement frippery or survival. 4 Take gap years? Future 70 becomes the new 50 What’s the future for financial services? Being online or digital isn’t enough What should financial brands do? 5 A final word
  • 7. Viewpoint / August 09 p.07 1 Introduction Increasing immigration and diversity The future, it’s all about the experience The future of consumer finance 2 Demographic change 2: The increasing financial diversity, ethnic and cultural audiences over Demographics ethnic diversity driven by distinct communities’ the next few years, means we’d better The baby boomers financial capabilities, channel get used to saying a financial hello, To fund the cost of this growing group Ethnic diversity preferences, and cultural attitudes or is that: of pensioners expecting to lead an Increasing connectivity towards banking, saving and investing, active and fulfilled retirement, the • Bonjour will in turn drive a requirement for UK will need to attract significant • Hola new products, services and ultimately numbers of migrant workers into • Witaj new competitors as their home-grown 3 its economy. • Hei financial brands will follow these Legislation • Здороваться We’ve seen a steady influx of migrants immigrant communities. RDR • Salut since 1995, and this has grown to a This might feel far-fetched, but we’ve The pensions Act 2008 point where skilled migrants now already seen some changes with the Free money guidance account for 2.75% of the country’s development of Polish bank accounts workforce and their spending supported and Shariah-compliant products. This £8.4bn of the UK economy in 2007. however is just the tip of the iceberg, This is estimated to rise to a record 4 as over the next few years we will see £77bn by 2012.* Future an explosion of new solutions. What’s the future for This influx of new migrants will not So whether it’s money transfer or financial services? only enhance our ethnic diversity over multi-jurisdictional savings accounts, Being online or digital the short and medium term, but will isn’t enough the need for ever-more products to affect the future landscape of financial What should financial satisfy the needs of increasingly niche brands do? brands and products. 5 A final word *Source: www.hrmagazine.co.uk/news/798191/Migrants-will-contribute-77-billion-UK-economy-2012/
  • 8. Viewpoint / August 09 p.08 1 Introduction Increasingly seeking recommendation The future, it’s all about the experience The future of consumer finance 2 Demographic change 3: the internet as a retail channel, it Demographics increasing connectivity – means the likely battleground for MySpace, founded August 2003 The baby boomers the boom in social networking the next generation’s £ or € is set Facebook, founded February Ethnic diversity to be fought in the aisles of social The recommendation generation are 2004 Increasing connectivity networking sites, where the power the next big group waiting in the Bebo, founded January 2005 of recommendation will rule. wings that’ll have a major impact upon financial services. Age is not a barrier All these are in the top ten of the 3 UK’s most-used websites. Central to the rise of this generation Although 58% of social networkers Legislation has been the rapid growth of social are under 35 years of age, the RDR networking sites and technologies. baby-boomer generation aren’t With the scale and impact of the The pensions Act 2008 excluded, with sites such as Saga There are an estimated 11 million ‘Recommendation Generation’ set to Free money guidance Zone now bringing the older age active social networkers in the UK who increase over the next ten years, this groups into the social networking fold. use online message boards, social new breed of consumer will become communities and blogs, for information No matter what is said of this an increasingly lucrative target due to 4 about brands and products. That’s phenomenon, whether good or bad, their financial clout, purchasing power Future double what it was two years ago and, as these networks develop to include and size. What’s the future for of these, 38% access their profile at more mobile technologies and other financial services? least once a day! forms of media such as video, text and Being online or digital speech, you can be sure that the isn’t enough When you couple this trend with the stories, messages and opinions they What should financial fact that during the next three years brands do? spread travel ever quicker. 68% of consumers will happily use 5 A final word
  • 9. Viewpoint / August 09 p.09 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics The baby boomers Legislation Ethnic diversity Increasing connectivity 3 Legislation RDR The pensions Act 2008 Free money guidance Regulation, regulation, regulation 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial There are three bits of important market legislation that are about to impact the market in the next few They are: 1. RDR 2. Pensions Act 2008 brands do? years. These initiatives will have a 3. Money guidance profound and lasting impact upon 5 distribution, as well as consumer A final word attitudes and behaviours.
  • 10. Viewpoint / August 09 p.10 1 Introduction The future, it’s all about the experience The future of consumer finance 2 The changes in distribution Demographics The baby boomers Legislation change 1: RDR distinction between independent, What’s almost certain about RDR Ethnic diversity restricted and tied advice. is that it will continue the well- RDR is set to be a huge catalyst for Increasing connectivity defined exodus of advisers from change in how financial investment RDR will no doubt lead to a financial services. products and services can and will be fragmentation and polarisation of sold in the future. Currently it affects the market, with some brands and Because since the beginning of the 3 just investments and their advisers, organisations choosing to focus on 1990s, with each subsequent piece Legislation but surely it will broaden out to distinct audiences such as high-net- of regulation, there has been a RDR include a much wider range of worth or specialist areas. decrease in the total number of products such as mortgages. advisers in the industry. The pensions Act 2008 It is affectionately called the RD Free money guidance RDR outlines distinct types of advice implementation programme and and sales process that can be used has an expected date of instigation with consumers, as it makes a of 2012. 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial brands do? 5 A final word
  • 11. Viewpoint / August 09 p.11 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics Compulsion is on the horizon and approaching fast The baby boomers Increased action will lead to increased interest Ethnic diversity Increasing connectivity Legislation change 2: accounts where your pension monies be the possible outcomes? Are the The Pensions Act 2008 will accumulate over time. BRIC economies riskier than the UK? What’s the difference between To make sure we [UK plc] have While it should mean a better-funded large cap and special situations? 3 some way of funding future retirees, retirement for future generations, it And when’s the right time to buy Legislation the Government introduced the is also likely to create a huge swell of a pension annuity? RDR Pensions Act in 2008, the name for consumer desire for information and the new, Government-backed national interest about their money, where it’s All of which hasn’t been planned for The pensions Act 2008 pension plan. going and how it’s invested. as yet, or if it has, it isn’t clear how Free money guidance this is going to be communicated, This piece of legislation will introduce This likely outcome of increased but not to worry, the government has in 2012 the first piece of compulsory interest and desire for knowledge decided that. national pension saving the UK has will mean a much better form of 4 ever seen. If you’re wondering, your communication than an annual Compulsion won’t come from advice, Future current National Saving Investment black-and-white statement of funds the Government has decided to What’s the future for under management. What they’ll provide guidance. financial services? contributions aren’t actually saved. The Pensions Act is putting an end to want to know is, if they change the Being online or digital isn’t enough that ambiguity by setting up personal underlying investments, what could What should financial brands do? 5 A final word
  • 12. Viewpoint / August 09 p.12 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics Help and guidance are on the way The baby boomers With compulsion comes guidance and true consumer interest Ethnic diversity Increasing connectivity Legislation change 3: The exact nature of this service and gurus and personalities will likely lead Free money guidance how it complements independent, to the likes of Martin Lewis, Alvin Hall restricted or basic advice isn’t yet and Robert Peston being treated like Money guidance is the free advice clear, but it will ensure that everyone Rock’ n’ Roll Legends and filling 3 service that is being implemented in the UK has access to at least concert halls [virtually] with screaming to coincide with the launch of Legislation basic levels of financial information hordes of silver-surfer fans. the national pension plan or RDR and guidance. personal accounts. The pensions Act 2008 While this service will most probably The service will help people with: Free money guidance The service has been developed as be launching in 2012 to give a flavour a response to the earlier findings • budgeting their weekly or of the volume of interest that could of the Thoresen Review on Generic monthly spending; develop, just look at the one million Financial Advice. • saving and borrowing, and 4 or more mobile bank account enquires insuring and protecting The guidance service is expected during October 2008 when stock Future themselves and their families; to be a multichannel solution, markets tumbled. It’s just not clear What’s the future for • retirement planning; financial services? including face-to-face, web and how the Pensions Delivery Service • understanding tax and welfare Being online or digital telephone support. will cope with that volume of interest isn’t enough benefits; in information. Importantly, once we’ve put the funding • jargon-busting – explaining the What should financial brands do? issues to one side, this service should One way this increased desire for more technical language we use in the have a major impact on increasing the and more financial information will financial services industry; 5 levels of financial literacy and play out will be the creation of big • importantly, money guidance is A final word capabilities among the UK population. financial celebrities. This desire for also completely sales-free.
  • 13. Viewpoint / August 09 p.13 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics The baby boomers Future Ethnic diversity Increasing connectivity 3 Legislation RDR The pensions Act 2008 Free money guidance What’s the future for financial services? 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial With so many policies, trends, social and economic changes all converging at once, there will be plenty of What I believe is that no one solution will win out, in fact we’re not going from business model A to business brands do? interesting solutions to come. model B, we’re going from business model A to business model A to Z. 5 A final word
  • 14. Viewpoint / August 09 p.14 1 Introduction Being online or digital isn’t enough The future, it’s all about the experience The future of consumer finance Although financial services have been online for a long time and internet banking has revolutionised the way 2 we manage our finances, today’s consumers still Demographics The baby boomers expect more... Ethnic diversity Increasing connectivity To infinity and beyond! 3 Legislation I’m a child of a certain generation, so Yet despite this rampant charge to the the industry as a whole is relatively forgive me when I say ‘It’s broadband internet, they’ll still continue to crave slow at realising its true potential for RDR Jim, but not as we know it!’ The fact a personal relationship with their bank building stronger and more meaningful The pensions Act 2008 is, putting the Digital Britain Report or financial services provider. experiences for their clients. Free money guidance to one side, the UK is on the cusp There are other emerging technologies of introducing superfast broadband The UK’s first home online that will shape consumers expectations services that will offer huge swathes banking service was set up by the of the type and quality of service they 4 of the UK 50, 100 or 250 megabit per Nottingham Building Society back want from financial companies, but as Future second download speeds over the next in 1983! a starter I have outlined a few in the What’s the future for five years. following pages. financial services? With this radical change to high- Being online or digital isn’t enough definition multiscreen and application What is noticeable is that although What should financial connectivity, UK consumers will want banks and financial services brands do? content that’s richer, smarter and companies are always among the more dynamic than ever before. early adopters of new technology, 5 A final word
  • 15. Viewpoint / August 09 p.15 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics Social technologies The baby boomers I’ve already written about connected By the way, Google’s OpenSocial has A wave is shared. Any participant can Ethnic diversity and social customers, but the a name: it’s called Wave and it’s here reply anywhere in the message, edit the Increasing connectivity technology that’s allowing them now wave.google.com content and add participants at any to connect is also changing. And just what is a wave? point in the process. Then playback lets anyone rewind the wave to see Google’s ‘OpenSocial’ programme is 3 who said what and when. a new platform that will help build Legislation social networking or documents into A wave is live. With live transmission RDR the very fabric of the internet. as you type, participants on a wave The pensions Act 2008 can have faster conversations, see This will obviously give the power Free money guidance edits and interact with extensions of recommendation a real boost, as in real-time. consumers will no longer be restricted in having to go where the But technology goes beyond the 4 conversations are, but simply follow current view of the internet, it the conversations seamlessly from one includes other dynamic elements and Future network to another. Eventually this will A wave is equal parts conversation and will start to seamlessly integrate in to What’s the future for financial services? expand to include more than just the document. People can communicate our offline experience as well as just Being online or digital single channel, and the written word and work together with richly formatted our online life. isn’t enough and conversations will move from one text, photos, videos, maps, and more. What should financial media to another! brands do? 5 A final word
  • 16. Viewpoint / August 09 p.16 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Smartphones enquiries in October 2008 alone more than 400 million members Demographics as customers feeling the economic worldwide. This by size would The baby boomers You can’t walk down any high street downturn, kept a watchful eye on make it the third most populated in the UK without being bombarded Ethnic diversity their money. country in the world, bigger than by advertising for the latest iPhone Increasing connectivity the US! or HTC Hero. The rise in use of PDAs And continuing on this theme, a recent and Smartphones means users are study by financial consultancy Celent The take-up and use of these browsing on the go, and if they’re suggests 35% of online banking technologies by financial services 3 connected they can make payments households will be using mobile brands is slow, but ultimately it’s Legislation at the point of sale or arrange banking by 2010 – that’s next year! inevitable, as consumers expect finances remotely. financial services organisations to RDR VoIP solutions deliver communications using the The pensions Act 2008 Now many believe that the size, scale If your children are anything like mine media and technology that they’re Free money guidance and importance of mobile systems are they’ve been using VoIP protocols, like already using. overestimated. However, by the end of Windows Messenger, Windows Live or 2011 – that’s just 28 months away – Lots of financial marketers will say, Skype for as long as they can mobile contactless payments will ‘but I am digital. I’m online, look at 4 remember. make up 10% of the contactless my banners, my MPUs’. But in today’s Future payment market, and that’s before These technologies combine the power and tomorrow’s technological world, What’s the future for Barclaycard contactless really gets of text, voice, and video in real-time. being online isn’t enough. financial services? off the ground. They allow for instant messaging, file Being online or digital What consumers expect is for you isn’t enough transfer and video conferencing all The change towards mobile banking to be there, wherever there is, and What should financial over the same networks. brands do? is already happening: Monilink, the connected is so integrated into future UK mobile banking network, says it And to give you an idea of the scale consumer behaviour it is no longer 5 processed over one million account of the networks, Skype currently has an activity in its own right. A final word
  • 17. Viewpoint / August 09 p.17 1 Introduction The future, it’s all about the experience The future of consumer finance 2 The low-down on the high street What does this mean for banks? products, but recent events have Demographics thrown all that into question. The baby boomers Another trend on its way in the next Banks and financial services providers few years is the change in the have already started to compare And it will increasingly become Ethnic diversity traditional high street and the way themselves with retailers rather than market share that makes the biggest Increasing connectivity we all shop. with other financial institutions. difference, as other brands start to consider the limitations of white- Soon we won’t distinguish between And they’ll have to continue to do labelling and think about the benefits internet shopping and shopping in so, as customers are happy to buy 3 of being regulated themselves. the high street any more: there’ll just any commodity, be it toilet tissue Legislation be shopping. or personal loans, from anyone who The key to this shift is customer RDR offers a good rate or price, but more emotions. Other retailers and FMCG Shopping in the high street will evolve The pensions Act 2008 importantly offers a better and more brands have already exploited this to include computers, touchscreens Free money guidance enjoyable experience. territory, but financial services brands and the internet, so that consumers have found it difficult, as they’ve can know straightaway the information It’s important to remember that lacked the physical environment or they want and the availability of items retailers aren’t new to this game, experience needed to build brand 4 they need. The move will be facilitated retailers such as Tesco have already empathy. But this will have to change. Future by a network – and this network will been supplying financial products What’s the future for be ubiquitous. So the use of any for more than a decade! financial services? traditional physical retail space will Historically, the argument has been Being online or digital be dependent solely on what it adds isn’t enough that other retailers didn’t have the to the consumers’ experience and What should financial banking expertise to offer financial brands do? their desire for it. 5 A final word
  • 18. Viewpoint / August 09 p.18 1 Introduction The likely winner… The future, it’s all about the experience The future of consumer finance 2 So just where will all this change What they actually look like is difficult click here to visit mint.com Demographics lead us. We believe that this new to say. We have however started to see The baby boomers future will fall neatly into the hands a number of new quasi guided sales Ethnic diversity of a new sales advice channel that solutions [that’s restricted sales in Increasing connectivity will be in part restricted and the new RDR world] come to market, independently advised. particularly in the US. Here are some examples. What’s not clear is who will be offering 3 it: banks, supermarkets or intermediary mint.com Legislation firms, or indeed soft drinks companies. A free web-based personal financial RDR What is clear is that in most instances management service created by The pensions Act 2008 the web will be used as a distinct entrepreneur Aaron Patzer. It allows Free money guidance communications and sales channel users to track financial transactions in its own right; it will seamlessly such as bank, credit card, investment mix distinct advice and recompense and loan balances through a simple models for a mix of clients based single interface and then provides 4 upon relationship, need and value. account aggregation through a deal Future with Yodlee. What’s the future for financial services? Being online or digital isn’t enough What should financial brands do? 5 A final word
  • 19. Viewpoint / August 09 p.19 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Wesabe click here to visit Wesabe Demographics The baby boomers Similar to mint in that it offers a money management tool. But it goes one step Ethnic diversity further by introducing the community Increasing connectivity element, to help consumers learn and benefit from the actions and knowledge of other members. 3 Legislation RDR The pensions Act 2008 Free money guidance 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial brands do? 5 A final word
  • 20. Viewpoint / August 09 p.20 1 Introduction The future, it’s all about the experience The future of consumer finance 2 lovemoney.com is the new offering click here to visit lovemoney.com Demographics from the people at Motley Fool. It has The baby boomers great content and savings ideas as Ethnic diversity well as product aggregation. With a Increasing connectivity little imagination you can picture it with a Skype interface, some decision trees, and all of a sudden you’ve got the starting of mass intermediation 3 or an enriched sales advice channel. Legislation RDR The pensions Act 2008 Free money guidance 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial brands do? 5 A final word
  • 21. Viewpoint / August 09 p.21 1 Introduction The future, it’s all about the experience The future of consumer finance 2 MoneySavingExpert.com click here to visit MoneySavingExpert.com Demographics The baby boomers The most visited financial site in the UK, and for that reason alone Ethnic diversity it is well worth a mention. Increasing connectivity However it doesn’t take too much hard work or imagination to see how this site could develop in the future. What about 3 this site expanding its current core Legislation premise and becoming an all-inclusive RDR advice environment, or the first The pensions Act 2008 people-based ratings agency? Yes move Free money guidance over S&P, the people are coming. 4 Future What’s the future for financial services? Being online or digital isn’t enough What should financial brands do? 5 A final word
  • 22. Viewpoint / August 09 p.22 1 Introduction What should financial brands do? The future, it’s all about the experience The future of consumer finance Here are three things that we believe financial services brands should start to do to ensure that they can 2 compete for the future of financial consumers. Demographics The baby boomers 1 Focus on being useful 2 3 Ethnic diversity Find a voice and connect with Create an experience Increasing connectivity your audience Serious competitive advantage lies Financial services brands need to think beyond their core products to It’s not enough just being online. in making any customer feel better ensure that they develop their brands Financial brands need to have in ways which don’t just relate to 3 as a utility. This will allow them to add opinions and add to the conversations actual product consumption. So by Legislation value to customers. And it will free that consumers are having, and not sit concentrating on the customer RDR customers from thinking about these on the sidelines. You need to experience first, then the message The pensions Act 2008 brands as interested only in product demonstrate your beliefs and facilitate and finally product, financial brands Free money guidance and profit. Think calculators, tools, the debates on risk and finance. This will be able to grab market share. context case studies and education. way you’ll create a valued reason for This means a change in traditional audiences to reference and find you. systems: offline communications Currently so many big organisations, such as brochures and branches 4 especially financial ones, are silent will become a means of driving Future in this conversation-driven world. They traffic online and creating desire, What’s the future for need to create, have a view and voice as well as being a retail channel. financial services? it in a relevant and interesting way Being online or digital isn’t enough that distinct communities can use. What should financial brands do? 5 A final word
  • 23. Viewpoint / August 09 p.23 1 Introduction The future, it’s all about the experience The future of consumer finance 2 Demographics The baby boomers A final word Ethnic diversity Increasing connectivity 3 Legislation RDR The pensions Act 2008 Free money guidance Predicting the future of the financial The survival of Financial services brands We hope you enjoyed reading this. And services industry isn’t a precise science. will depend upon their ability to adapt if you’ve any thoughts of your own you’d 4 However there are a number of to changing circumstances – and to like to add, please send them to us at Future certainties that will definitely impact do that we need to start developing viewpoint@teamspirit.uk.com or call What’s the future for us all, such as the Pensions Act, strategies now. David McCann on 020 7360 7878. financial services? RDR and the development and growth Being online or digital isn’t enough of networked consumers. What should financial brands do? 5 A final word

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