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Description

Description

“The digital revolution is shaking up the financial services sector as both new and established companies develop innovative solutions to deliver more personalised, flexible and streamlined products and services. But while many innovations have gained considerable traction, the cautious approach many consumers adopt towards their finances provides a challenge for emerging brands seeking to reach a wider audience.”

– Thomas Slide, Senior Financial Services Analyst

This report examines the following issues:

  • Security has to be a fundamental feature of financial innovations
  • Interest in innovation goes beyond young urbanites
  • Moving from early adopters to the mass market

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Report definition
      • Executive Summary

          • The market
            • Open banking progresses but SCA delayed
              • New RBS brand Bó enters FCA innovation sandbox
                • Incumbents invest heavily to get ahead
                  • The consumer
                    • 37% regularly check their bank balance on a smartphone
                      • Figure 1: Frequency of use of financial innovations, August 2019
                    • Majority prefer to wait until innovations are widely used
                      • Figure 2: Approach to financial innovations, August 2019
                    • Banks and insurers lack a reputation for innovation
                      • Figure 3: Attributes of financial product providers, August 2019
                    • Security is a critical factor in new financial innovations
                      • Figure 4: Priorities when considering a new financial product, August 2019
                    • Fingerprints are seen as most secure
                      • Figure 5: ID confirmation methods seen to be most secure, August 2019
                    • Attachment to real people remains
                      • Figure 6: Attitudes towards innovation in financial services, August 2019
                    • Pioneers spread across the age groups
                      • Figure 7: Cluster analysis of attitudes towards financial innovation, August 2019
                    • What we think
                    • Issues and Insights

                      • Security has to be a fundamental feature of financial innovations
                        • The facts
                          • The implications
                            • Interest in innovation goes beyond young urbanites
                              • The facts
                                • The implications
                                  • Moving from early adopters to the mass market
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • Open banking progresses but SCA delayed
                                          • New RBS brand Bó enters FCA innovation sandbox
                                            • Incumbents invest heavily to get ahead
                                            • Market Environment

                                              • Open Banking progresses slowly
                                                • SCA rollout delayed
                                                  • ClearScore and Monzo are the most recognised disruptor brands
                                                    • Figure 8: Awareness of selected disruptive financial services providers, June 2019
                                                  • 83% personally own a smartphone
                                                    • Figure 9: Smartphone ownership, by age group, June 2019
                                                • Recent Developments

                                                  • FCA introduces the cohort five of its regulatory sandbox
                                                    • Developing the marketplace model
                                                      • An openness to failure is an important ingredient for innovation
                                                        • On-demand insurance policies offer flexibility and simplicity
                                                          • Incumbents invest heavily to get ahead
                                                          • The Consumer – What You Need to Know

                                                            • 37% regularly check their bank balance on a smartphone
                                                              • Majority prefer to wait for innovations to become mainstream
                                                                • Banks and insurers lack a reputation for innovation
                                                                  • Security a critical factor in new financial innovations
                                                                    • Fingerprints are seen as most secure
                                                                      • Attachment to real people remains
                                                                        • Pioneers spread across the age groups
                                                                        • Usage of Financial Innovations

                                                                          • Half make contactless payments on a weekly basis
                                                                            • Figure 10: Frequency of use of financial innovations, August 2019
                                                                          • But there is a clear generational difference in usage
                                                                            • Figure 11: Regular users of innovations, by age group, August 2019
                                                                          • Innovations are becoming well-established among young people
                                                                            • Figure 12: Usage of financial innovations, August 2019
                                                                        • Approach to Financial Innovations

                                                                          • Most shy away from trying new financial innovations
                                                                            • Figure 13: Approach to financial innovations, August 2019
                                                                          • 25-34 year olds are most confident to try new FinTech
                                                                            • Figure 14: Approach to financial innovations, by age group
                                                                        • Attributes of Financial Product Providers

                                                                            • Banks and insurers lack a reputation for innovation
                                                                              • Social media companies need to address trust issues
                                                                                • Figure 15: Attributes of financial product providers, August 2019
                                                                                • Figure 16: Consumer attitudes towards financial innovation, August 2019
                                                                            • Priorities When Considering Financial Products

                                                                              • Security is a critical factor for gaining trust
                                                                                • Figure 17: Priorities when considering a new financial product, August 2019
                                                                              • Security is particularly important for mass adoption
                                                                                • Figure 18: Importance of ‘high level of security’ by approach to innovations in financial services, August 2019
                                                                            • Security Features Used

                                                                              • PIN numbers and passwords remain the primary ways to confirm identity
                                                                                • Figure 19: Technology used to confirm identity, August 2019
                                                                              • But fingerprint technology is seen to be most secure
                                                                                • Figure 20: ID confirmation methods seen to be most secure, August 2019
                                                                            • Attitudes towards Innovation in Financial Services

                                                                              • The importance of access to a real person
                                                                                • Lack of faith in roboadvisers and chatbots
                                                                                  • Figure 21: Attitudes towards innovation in financial services, August 2019
                                                                                • The challenge of trust for disruptors and innovators
                                                                                  • Figure 22: Attitudes towards innovation in financial services, August 2019
                                                                                • Older people see the benefits of innovation, but not smartphones
                                                                                  • Figure 23: Attitudes towards the benefits of innovation in financial services, by age group, August 2019
                                                                                • Most have faith in the ability of incumbents to survive
                                                                                  • Figure 24: Attitudes towards the impact of innovation in financial services, August 2019
                                                                              • Target Group Analysis

                                                                                  • Pioneers
                                                                                    • Pragmatists
                                                                                      • Avoiders
                                                                                        • Apathetics
                                                                                          • Figure 25: Cluster analysis of attitudes towards financial innovation, August 2019
                                                                                        • FinTechs should look beyond urban Millennials
                                                                                          • Figure 26: Cluster analysis of attitudes towards financial innovation, by age group, August 2019
                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                        • Abbreviations
                                                                                          • Consumer research methodology
                                                                                            • Correspondence analysis methodology

                                                                                            This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

                                                                                            • Market

                                                                                              Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

                                                                                            • Consumer

                                                                                              Mintel's proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

                                                                                            • Brand/Company

                                                                                              Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

                                                                                            • Data

                                                                                              Market reports provide appendices of data to support the research and insight produced. Our tables of data are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

                                                                                            Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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