YOUBIQUITY FINANCE 3Consumers, mobile and social mediaMeeting the demands of consumers in the futureMarch 2012
Contents    Summary1   Page 3    Introduction and methodology2   Page 4    Smartphones are go3   Page 5    Mobile banking ...
1  Consumers, mobile  and social mediaSummaryYoubiquity Finance is a new trend in retail financial services      This is a...
2 Introduction and methodologyIntroduction and methodologyPoliticians, management gurus, financial service leaders and    ...
3  Smartphones  are goMore and more consumers are using smartphones, whetherBlackberry (11%), Apple (16%) or Google Androi...
4    Mobile banking and    paymentsMobile banking and payments: set to takeoff in 2012?                                   ...
5    Attitudes to mobile    payments are    positiveThe range of opportunities and platforms for cashless paymentsis growi...
6  Ready for  location-based  services?If more payments are made by consumers using contactless                  A system ...
7     Social media and     collaborationSocial media and collaboration is growing in                       In the way that...
8  Consumers are  becoming more  interested in videoVideo communication with financial services providers isbecoming more ...
9  Youbiquity FinanceThe future of sales and service                                    Cross-channel communication means ...
9 Youbiquity FinanceCustomer journey for purchasing home insuranceRead review by journalist/ expertRead online review by a...
9  Youbiquity FinanceThe central challenge of Youbiquity Finance is to make finance    differently at national level. The ...
9  Youbiquity FinanceYoubiquity Finance RecommendationsThe research has captured consumers changing attitudes andbehaviour...
Offices WorldwideThe services described in this publication are subject to availabilityand may be modified from time to ti...
Youbiquity Finance - Changes in Consumer Behaviour
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Youbiquity Finance - Changes in Consumer Behaviour

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This white paper Youbiquity Finance report is the second of three based on a survey of 2,000 consumers. It focuses on mobile, social media and video, and highlights changes in consumer behaviour. Includes tables and infographics and ends with Youbiquity recommendations for providers. BT did research with 2000 customers across four countries in 2011. This white paper explores the results, and coins the term “Youbiquity”, which gives identity to Financial services being ubiquitous and the importance of our services being personal to our customers.

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Youbiquity Finance - Changes in Consumer Behaviour

  1. 1. YOUBIQUITY FINANCE 3Consumers, mobile and social mediaMeeting the demands of consumers in the futureMarch 2012
  2. 2. Contents Summary1 Page 3 Introduction and methodology2 Page 4 Smartphones are go3 Page 5 Mobile banking and payments4 Page 6 Attitudes to mobile payments are positive5 Page 7 Ready for location-based services?6 Page 8 Social media and collaboration is growing in finance7 Page 9 Consumers are becoming more interested in video8 Page 10 Youbiquity Finance9 Page 112
  3. 3. 1 Consumers, mobile and social mediaSummaryYoubiquity Finance is a new trend in retail financial services This is a response to the emphasis consumers now place onthat is playing out in markets around the world, including time and speed, their willingness to adopt technology (includingGermany, Spain, the UK and USA. Many industry experts have smartphones), and their increasing engagement with financialpredicted changes in retail financial services, but our survey of services due to the consequences of the economic downturn.2,000 consumers puts many of these ideas to the people thatmatter. It has shown that consumers increasingly value access This Youbiquity Finance report is the third in a series of three.to information, accounts and providers when they are on the It focuses on mobile, social media and video and highlights themove, at work, in their homes, or wherever they may be. following changes in consumer behaviour. ■■ onsumers are spending more time and energy C ■■ Small numbers of consumers would use social media managing their money (65% agree). On the lookout for to contact their banks, with 13% of Spanish consumers the best deal (57%), they say they are less loyal to banks believing their bank already offers this service. However, than in the past (50%). 57% say they would not use social media to contact their bank for customer service. ■■ Consumers are enthusiastically adopting mobile banking solutions (24% have tried using a mobile banking ■■ 43% of consumers score their own bank as not being application at least once). However, persistency of good at regularly introducing new ideas to improve usage is lower than some predicted. banking for customers. ■■ Nearly 50% of online consumers in Germany, Spain, the ■■ of consumers would be enthusiastic about sharing 4% UK and USA have a smartphone. their Facebook profile with their financial services provider. ■■ 50% like mobile banking because they can check the account balance before making a purchase. ■■ 25% of 16–24 year-olds might use video-chat to speak to the bank. ■■ 49% of consumers in Spain want to be notified by email, text or phone when a better deal is available, as do 39% ■■ Youbiquity Finance captures the trend of consumers in the UK, 33% in Germany and 28% in the USA. wanting their financial services providers to be available through an increasingly wide range of channels and ■■ 34% of US and 32% of UK consumers say they would locations. The average number of channels used be interested in making mobile payments of up to to purchase a new product is 2.9, with nearly 1 in 2 £15 / €20 / $20. consumers agreeing they continually change how they ■■ Social media sites are popular, but consumers have contact financial providers. been slower to use these for retail financial services than in other sectors such as travel and electronics. 7% are interested in peer-to-peer lending. 3
  4. 4. 2 Introduction and methodologyIntroduction and methodologyPoliticians, management gurus, financial service leaders and Youbiquity Finance sets out to understand the zeitgeist intechnology leaders have discussed the future of retail financial retail financial service. This latest research covers how theservices extensively since the global economic crisis began in Autonomous Customer relates to banking and insurance across2007. This series of three papers – Youbiquity Finance – aims the vital international markets of Germany, Spain, the UK andto understand the consumer perspective on channels, finance USA. It details what consumers want from financial providers inand the future. Part 1 looks at ‘Consumers, money and the terms of service delivery, now and in the future.branch’, Part 2, ‘Consumers, contact centres and finance’,and Part 3, ‘Consumers, mobile and social media’. Davies Hickman Partners undertook a four-stage research process: BT Global Banking Financial Markets and Avaya n Comprehensive review of published sources on multi- commissioned Davies Hickman Partners in 2012 to channel CRM in financial services. complete a follow-on project from the Autonomous Customer research published in early 2011. The n ix S interviews with senior executives from leading previous research identified current and future financial providers. consumer attitudes and behaviours towards n nline O survey of 2,000 consumers: 400 in Germany, organisations across the UK and USA, including: 400 in Spain, 700 in the UK and 500 in the USA. ■■ 8% of consumers plan purchases online 7 The consumers matched a nationally representative sample in terms of age, income and employment. ■■ 59% prefer online because no one tries to sell them anything n nalysis A of the data inputs to create a presentation and white paper with key findings for retail finance. ■■ 51% trust customer forums more than organisations’ websites ■■ 60% agree they continually change how they BT Global Banking Financial Markets and Avaya are using contact organisations the results of Youbiquity Finance to improve the services and products they offer to the financial services sector. The outputs ■■ 46% say loyalty is a thing of the past. are designed to support collaboration with clients, improve decision-making and contribute to more efficient investments. research analysis Marketing Service Innovation The research, data and views in this paper have been prepared in good faith but neither Avaya, BT Global Services or the authors of the reports can be held responsible for any actions or otherwise taken by those reading the paper. 4
  5. 5. 3 Smartphones are goMore and more consumers are using smartphones, whetherBlackberry (11%), Apple (16%) or Google Android (20%). This At the same time, even voice is evolving:growth has been fuelled both by apps and the availability of ‘Search on the iPhone 4S has gone through the roof as a result of Siri.’HTML 5 websites. Director, Technology Supplier Smartphone adoption Germany 50% Spain 49% 20% 16% 11% 11% 8% 46% USA 43% UK 42% Android iPhone Other Blackberry iPad Other mobile phone smartphoneMuch more than a simple fashion, the number of people services providers have been cautious about developing appsusing their smartphones at least two to three times a week for or similar services, with concerns about security, adoptionnon-voice purposes are as follows: rates and cost high on the agenda. HTML 5 will speed the process of launching smartphone-ready apps which are device■■26% access Facebook, Google Plus or Twitter independent, adding a supply side driver to this market.■■47% SMS■■29% access websites■■13% access YouTube. 49% of 25–34 year-olds say they buy more from financial services providers ‘thatThe BT Global Services and Avaya Autonomous Customer make it easier for me to do business with them’.research in 2011 showed that consumers with smartphonescommunicated more with organisations than those with simplemobile phones. They were even more likely to use traditional Banks have sometimes been accused of being cautious whenchannels like the call centre. it comes to innovation – something consumers in our research concur with. In fact, 43% of consumers score their own bank asSome banks, including First Direct and Lloyds TSB, have had not being good ‘at regularly introducing new ideas to improvemobile banking offers for 10 years or more. But many financial banking for customers’. 5
  6. 6. 4 Mobile banking and paymentsMobile banking and payments: set to takeoff in 2012? 30% of 25–34 year-olds sayMobile banking is gaining popularity (24% have tried it), and they never have enough time to sort out theirconsumers are increasingly open to making mobile payments. personal finances.65% agreed with the statement, ‘I keep careful track of myfinances (eg, on paper, spreadsheets or online)’, which shouldbe easier with a smartphone. Additionally, there is the growing role of proactive or ‘smart’The most sophisticated mobile banking services offer account service, when financial services providers monitor customerinformation, opportunities to transfer money and make accounts and send useful reminders or notifications for importantpayments (Facebook friends), integrated customer service events. For example, the majority of customers would welcomelinks (sometimes through IVVR - interactive video and voice notification when their credit card has been blocked, rather thanrecognition) and location-based services (such as finding a discovering this when attempting a payment. In fact, 49% ofbranch or ATM). Consumers are aware of the potential benefits consumers in Spain want to be notified by email, text or phoneof using mobile finance and the immediacy of access could be when a better deal is available, as do 39% in the UK, 33% inan advantage to time pressed people. Germany and 28% in the USA. In the USA, some banking experts have Many benefits of mobile banking and payments expressed disappointment at the level of usage of  Germany Spain UK USA these services, as has been the case with manyI can use it while moving around 71% 64% 74% 63% apps (there are reportedly 500,000 apps for theI can find out if payments have been iPhone!). Our survey showed that around 10% 51% 52% 51% 41% of online consumers use their mobile financemade into my accountI can get my balance when I’m about to app on their smartphone several times a week 51% 49% 51% 51% (although this was highest, at 18%, in the USA).buy somethingIt makes banking much faster 38% 34% 37% 30%I can keep better control of my money 37% 46% 42% 42%I can make payments at the last minute 32% 34% 36% 36% 16% of consumers sayI can transfer money between accounts 27% 37% 46% 45% they have recommended their bank on the basis of its mobile banking app.They send me updates 27% 26% 19% 25%I can pay people quickly 23% 21% 18% 16%I can find the location of branches 22% 35% 24% 25%I can get the phone number to call my 11% 20% 12% 15%bank really easily 6
  7. 7. 5 Attitudes to mobile payments are positiveThe range of opportunities and platforms for cashless paymentsis growing fast, with contactless credit cards, Google Wallet, 10% of consumers sayNFC-enabled smartphones, and sound-based services like they have used their credit card or smartphoneZoosh. High-profile brands like Starbucks claim millions of to make payments for low-value items by ausers for its smartphone-based payment service. Square uses contactless device in-store (rising to 17%location-based services to send offers to consumers in-store among 16–24 year-olds).while enabling payment through the customer saying theirname and staff using their picture for identification.Our survey found that consumers are becoming more interestedin mobile payments, with 1 in 4 online consumers happy tomake mobile payments of up to £15 / €20 / $20. Speed andconvenience are the main benefits, but concerns about securityare the main barrier to adoption. Consumer attitudes to mobile payments  Germany Spain UK USAI would feel comfortable to use a smart phone to make 24% 29% 32% 34%payments for amounts up to £15/€20/$20I would worry about losing my smartphone if it was also a way 31% 42% 47% 47%of making paymentsIt would be fast and convenient 24% 35% 25% 32%I would worry that banks could see how I was spending money 25% 12% 10% 13%I prefer to use cash to keep track on my spending 29% 24% 36% 26% 7
  8. 8. 6 Ready for location-based services?If more payments are made by consumers using contactless A system which tells staff you are about to enter the bank sotechnology, they may show more willingness to share their they can tailor services to youlocation. The cost involved in financial services providersoffering mobile banking and payments services needs to bebalanced against the potential revenue gains through servicessimilar to Telefonica O2’s Priority Moments which drive indirectrevenue for the mobile phone company.Google Latitude, Facebook Places, Foursquare and similar 40%location-based services are being used by 18% of online 25% it would be aconsumers at least two to three times a week (although often for 21% nice to have 18%directions). Our survey showed that a minority of consumers are 10% it would really 6% 6% 6% add valueinterested in sharing their location with their financial services % agreeingprovider either for offers or a welcome on walking into thebranch. Share your location automatically using your smartphone so Although location based services are often seen as opportunities banks can offer you discounts depending on where you are to generate revenue, contextual information will potentially be (eg, near shops, cafes, cinemas) very useful to banks in providing a good service experience. If, for example, a customer has lost their banking card, location information from a banking app may help in directions or identification for a branch to provide assistance. Equally, QR codes could help in providing further contextual information to speed a service experience. 42% 22% it would be a 20% nice to have 16% 14% 10% it would really 5% 8% add value % agreeing 8
  9. 9. 7 Social media and collaborationSocial media and collaboration is growing in In the way that many retailers include customer recommendationsfinance, but slowly on their websites through services such as Bazaarvoice,While consumers are willing to use mobile apps, they seem less second-generation websites in financial services will includesure about using online forums and social media to collaborate social media feeds which may speed up adoption. In fact,with other consumers when it comes to their finances. In 26% of consumers we surveyed say ‘when I want to sort outmany industries, such as travel, consumer-to-consumer a problem with a product or service, increasingly I use onlinerecommendation and advice is rampant, but in financial services, customer forums’. Some are interested in disintermediation ofprogress is slower. The Autonomous Customer research in providers.2011 showed that 37% of online consumers have contributed toonline forums such as TripAdvisor. 7% of online consumersBanks such as American Express have had high-profile and are interested in peer-to-peer lendingplanned involvement in social media, and some consumers cansee the relevance of this channel for sales and service. Which of the following best describes why you might use However, only 4% want to use general online forums to sort Twitter, Google Plus or Facebook to interact with customer out their personal finances. The personal nature of money may services at your bank? mean the financial services providers are well placed to fill this   Germany Spain UK USA gap through provider-facilitated forums. 7% said it would really I am using these sites all add value ‘if you could help other consumers with problems 16% 28% 17% 20% the time with their financial products and services online’. The return for The bank offer this as a financial services providers would be access to personal data. 12% 13% 8% 12% service You’ll get better service 6% 9% 5% 8% I want to learn about 3% of online consumers say new products and 14% 19% 7% 15% services it would really add value to share their Facebook profile with providers (12% say it It gets complaints would be ‘nice to have’). 6% 12% 4% 8% resolved I want to embarrass my 5% 6% 4% 4% bank into action None of these - I would Financial services providers do need to invest in social media not use Twitter, Google to manage their reputational risk. 45% of consumers agree with Plus or Facebook, etc 64% 47% 69% 62% the statement, ‘Seeing negative coverage about your bank in to interact with customer services the press or on social media sites would make me move’. 9
  10. 10. 8 Consumers are becoming more interested in videoVideo communication with financial services providers isbecoming more interesting to global consumers, with 15% using 25% of 16–24 year-oldsSkype for video calls. This links to a long history of trials of video would like to use video-chat to speakconferencing in branches by a number of banks and the recent to a bankintegration of video into self-service kiosks as deployed by theBank of Moscow.With over 1 billion YouTube videos being viewed each day and33% of consumers watching clips posted by their friends or 10% of online consumersfamily, a video culture has been emerging for some time. The watch ‘how to’ videos (eg, eHow) two to threeuptake of video will probably be linked closely to online help, times a week or more.where consumers will have a choice of webchat, co-browsing,phone, email or video. Consumer preferences for online video-chat with a customer service agent from a financial services companyTotal Germany, Spain, UK and US % agreeing 16-24 25-34 35-44 45-54 55+2-way video, where they can see you and you can see them 25% 21% 22% 25% 22%1-way video, you can see them, but they can’t see you 24% 20% 18% 11% 9%No video, just voice 30% 32% 24% 27% 29%No preference 21% 27% 36% 37% 40%Banks such as ING Direct and Commonwealth Bank havestarted to upload videos on websites with useful financial adviceto appeal to the new generation of video-friendly consumers.9% of 16–34 year-olds said it would add real value to ‘useonline videos on YouTube to get advice about financial servicesproducts and why you need them’. 10
  11. 11. 9 Youbiquity FinanceThe future of sales and service Cross-channel communication means theOur survey has shown that consumers increasingly value contact centre is core to relationshipsaccess to information, accounts and providers when they are Channel fragmentation is ongoing, and convergence of deviceson the move, at work, in their homes, or wherever they may seems some way off despite the efforts of Apple and Androidbe. This Youbiquity Finance is characterised by the following with smartphones or tablets. Consumers prefer to switchchanges in consumer behaviour: channels depending on:■■ time pressure, meaning speed and simplicity ■■ Channel characteristics – what the device or media are suited to■■ technology adoption, including smartphones, which means consumers are ‘always on’ for data and other consumers ■■ Channel preference – what is available to the customer that they prefer using■■ financial engagement, which involves consumers taking more interest in their money. ■■ Occasion – the purpose of the contact or mood of the customerProviders of Youbiquity Finance now have the opportunity to ■■ Context – the situation of the customer (travelling, at work)build better relationships with consumers and therefore strongerand longer revenue streams. ■■ Supplier – what the provider offers in channel capability (eg out of hours service or availability of a mobile app) The upshot is that channel switching is widespread in financial services, with 37% of consumers agreeing they continually change how they contact financial providers. With customers using 2.9 channels on average to purchase a simple home insurance product, they have high expectations of providers bringing together disparate channels and personal data. 11
  12. 12. 9 Youbiquity FinanceCustomer journey for purchasing home insuranceRead review by journalist/ expertRead online review by another customerUsed price comparison websiteUsed financial service providers websiteContacted a 3rd party brokerPhoned the providerHad a face to face meetingFilled out a paper formApplied by postApplied onlineHad a web-chat conversation 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 12
  13. 13. 9 Youbiquity FinanceThe central challenge of Youbiquity Finance is to make finance differently at national level. The contact centre, whether localservices available everywhere, and integrate them in a way or central, will become the core of these new and traditionalthat provides seamless service to customers. The different channels. Its role as the ‘eyes and ears’ of the organisation willpreferences of German, Spanish, UK and US consumers show remain crucial in understanding customers’ experiences andthat this task can have a global direction but must be executed launching proactive contact to drive up recommendation scores. The Future Contact Centre Automated calls / IDV Inbound calls Social media Complex calls Video – ‘Branch’ calls direct branch Contact Traditional Centre core call centre - Youbiquity Mobile Finance E-mails banking Web self-service Web-chats Outbound calls support Smart outbound 13
  14. 14. 9 Youbiquity FinanceYoubiquity Finance RecommendationsThe research has captured consumers changing attitudes andbehaviours towards channels and communication with financialservice providers across Germany, Spain, the UK and US.Recommendations across the three reports include: ■■ Consumers are managing their money more closely and ■■ obile banking and payments are emerging fast M expect providers to offer a wide range of new channels and although on-going usage may not match trial by (voice self-service, mobile, social and proactive or consumers, ensuring that financial providers ‘own’ the ‘smart’ outbound communications), even if traditional mobile channel will be vital to maintaining customer channels like the branch, phone and internet remain the relationships. core means of communication. ■■ Social media has been taken up slowly by consumers ■■ Providers need to integrate these channels into existing in financial services as they are reticent about sharing offers to reduce customer effort and meet consumers information about their money indiscriminately. However, demands for security, time saving and convenience. This social media is capturing consumers’ attention, and for means the contact centre may become the ‘core’ of the this reason, it should capture providers’ attention too. relationship providing better access to channels, advice ■■ Segmenting products and service delivery offers and resolution of issues. It will be essential to prioritise opportunities to improve the cost base of the provider the ability of agents to answer complex questions and while making more relevant offers to consumers. This build relationships. will demonstrate to consumers that providers care and ■■ Cross and up-selling through digital channels is less will help build trust and relationships. effective than face to face and the phone, so providers ■■ Finally, improving business processes is vital to reduce need to retain these methods to drive sales while the effort and time required of consumers (and staff improving the data analysis and proactively prompting serving them) to manage their finances. consumers during digital communication. ■■ Turning the branch into an advice centre is a clear strategy as transactions decline. However, as retailers know, attracting footfall is critical and providers need to innovate in branch to drive sales. 14
  15. 15. Offices WorldwideThe services described in this publication are subject to availabilityand may be modified from time to time. Services and equipmentare provided subject to British Telecommunications plc’s respectivestandard conditions of contract. Nothing in this publication forms anypart of any contract.© British Telecommunications plc 2010Registered office: 81 Newgate Street, London. EC1A 7AJ Registeredin England No. 1800000.PHME: 58647

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