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Financial Services: The Path to Purchase - UK - June 2015

Online channels now dominate all stages of the research and purchase process in most financial markets. There is still a group who prefer to use branch-based services, but most consumers now expect to be able to find, research and arrange any product online. A provider that has a sub-standard offering is now at a major disadvantage.”
– Rich Shepherd, Financial Services Research Analyst

This report discusses the following key topics:

  • The internet is now key at all stages of arranging a product
  • Price can get people to switch, but other considerations make them stay
  • The changing role of brand image
70% of people say that it is essential to fully read product terms and conditions prior to purchase, while 52% say they prefer doing their own research rather than rely on expert advice. Both these statistics point towards consumers placing strong importance on taking personal responsibility for ensuring that products are suitable.
 
The belief that the best rates are reserved for new customers has been a long-standing gripe among consumers, and 58% believe that companies save their best offers for new customers. This perception will be a major reason behind the 40% who regularly check the market to make sure that they are getting the best rates on the financial products they own.

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Table of contents

  1. Introduction

      • Abbreviations
      • Executive Summary

          • Product arrangement
            • Insurance policies are the most commonly-arranged financial services products
              • Figure 1: Products arranged (including new or switched products) in the last three years, April 2015
            • Most new products are the result of opportunism, but active engagement is key
              • Figure 2: Reasons given for arranging a new current account, credit card, savings account and/or mortgage, April 2015
            • The research process
              • Online research is key for all products
                • Figure 3: Information sources used to research financial products before purchase, April 2015
              • Insurance buyers compare the market first: bank account buyers go direct to the provider
                • Figure 4: First information sources used to research financial products before purchase, April 2015
              • Preferred purchasing method
                • Consumers prefer to buy online, direct from their provider
                  • Figure 5: Method used to arrange financial products in the last three years, April 2015
                  • Figure 6: Agent used to arrange financial products in the last three years, April 2015
                • Attitudes towards arranging financial products
                  • Taking personal responsibility is a valued quality
                    • Figure 7: Agreement with attitudes towards researching and arranging financial services products, April 2015
                • Issues and Insights

                  • The internet is now key at all stages of arranging a product
                    • The facts
                      • The implications
                        • Price can get people to switch, but other considerations make them stay
                          • The facts
                            • The implications
                              • The changing role of brand image
                                • The facts
                                  • The implications
                                  • The Consumer – What You Need to Know

                                    • Consumers engage most regularly with insurance
                                      • Most new products are the result of opportunism, but active engagement is key
                                        • Online research is key for all products
                                          • The first point of call is heavily product-dependent
                                            • Consumers prefer to buy online, direct from their provider
                                              • Taking personal responsibility is a valued quality
                                              • Product Buying Activity

                                                • 37% have arranged a new motor policy in the last three years
                                                  • Figure 8: Products arranged (including new or switched products) in the last three years, April 2015
                                                • Millennials are the most likely to switch core products…
                                                  • …while Boomers concentrate on getting the best insurance deals
                                                    • Figure 9: Products arranged (including new or switched products) in the last three years, by age group, April 2015
                                                  • 35% have arranged no financial products in the last three years
                                                  • Prompts to Purchase

                                                    • A fifth arranged a product because they keep up to date with products…
                                                      • Figure 10: Reasons given for arranging a new current account, credit card, savings account and/or mortgage, April 2015
                                                    • …but opportunity is key
                                                      • Figure 11: Reasons given for arranging a new current account, credit card, savings account and/or mortgage, April 2015
                                                    • Limited offers can push people into bringing forward switching plans…
                                                      • …and the end of an introductory offer can act as a trigger to check the market
                                                        • Changing personal circumstances can prove the worth of personal service
                                                          • Brand image still matters
                                                          • Product Research

                                                            • Most people research financial products online…
                                                              • Figure 12: Information sources used to research financial products before purchase, April 2015
                                                            • …but branches are still widely used
                                                              • Figure 13: Use of bank/building society branch to research financial products, by product arranged, April 2015
                                                            • Mortgage customers are the most likely to seek professional help
                                                                • Figure 14: Use of professional personal advice/guidance* to research financial products, by product arranged, April 2015
                                                              • Harness peer reviews to attract younger consumers
                                                                • Figure 15: Consumers who spoke to friends and/or family when arranging their most recent current account, credit card or savings account, by age, April 2015
                                                                • Figure 16: Consumers who spoke to friends and/or family when arranging their most recent car or home insurance policy, by age, April 2015
                                                            • First Point of Contact

                                                              • Price comparison websites are the key first stop for research
                                                                  • Figure 17: First information sources used to research financial products before purchase, April 2015
                                                                • Insurance is product led…
                                                                  • …while brands are more important for banking customers
                                                                    • Advisers are the most common first point of call for mortgage borrowers
                                                                    • Purchase Methods

                                                                      • Offline points of sale are falling away
                                                                          • Figure 18: Method used to arrange financial products in the last three years, April 2015
                                                                        • Finance, on the go
                                                                          • In the main, consumers prefer to arrange products directly
                                                                            • Figure 19: Agent used to arrange financial products in the last three years, April 2015
                                                                        • The Road to Purchase

                                                                          • Current accounts
                                                                            • Most common path to purchase
                                                                              • Figure 20: Current account purchase method, by initial research source, April 2015
                                                                            • Credit cards
                                                                              • Most common path to purchase
                                                                                • Figure 21: Credit card purchase method, by initial research source, April 2015
                                                                              • Savings accounts
                                                                                • Most common path to purchase
                                                                                  • Figure 22: Savings account purchase method, by initial research source, April 2015
                                                                                • Car insurance
                                                                                  • Most common path to purchase
                                                                                    • Figure 23: Car insurance purchase method, by initial research source, April 2015
                                                                                  • Home insurance
                                                                                    • Most common path to purchase
                                                                                      • Figure 24: Home insurance purchase method, by initial research source, April 2015
                                                                                  • Attitudes towards Product Research and Purchase

                                                                                    • It is essential to check Ts and Cs, but can it be done?
                                                                                      • Figure 25: Attitudes towards researching and arranging financial services products, April 2015
                                                                                    • Keep it simple to avoid confusion
                                                                                      • Could regulation overcome apathy?
                                                                                          • Figure 26: Agreement with attitudes towards researching and arranging financial services products, by product buying activity, April 2015
                                                                                        • Half prefer to do their own research than trust experts
                                                                                          • The price of loyalty
                                                                                              • Figure 27: Agreement with the statement “Companies save their best offers for new customers”, by product buying activity, April 2015

                                                                                          Companies Covered

                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                          Financial Services: The Path to Purchase - UK - June 2015

                                                                                          US $2,914.30 (Excl.Tax)