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UK Financial Services Disruptors Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Financial Services Disruptors market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key points included

  • Security concerns hold disruptors back
  • Innovative disruption is welcomed by many
  • Disruptors need to move beyond well-off, young city dwellers

Covered in this report

Defining a disruptive brand is difficult; successful companies that would have once been considered disruptive can lose this status as they become part of the mainstream. For example, when Direct Line opened as the UK’s first telephone-only motor insurer in 1984, it was very much a disruptive force in the market. 35 years later, it has long been established as one of the biggest insurers in the country.

Typically, a disruptive brand is one that approaches a market in a different way to established incumbents, be that in terms of the products and services on offer, distribution channels or marketing strategies. In today’s financial services markets, disruptors are also often, but not always, young companies with a focus on digital solutions.

For this report, we have identified 11 brands from across a range of financial markets to gauge awareness of disruptors. These brands are all fairly well established in their sectors, with products on offer to mainstream consumers.

Expert analysis from a specialist in the field

Written by Richard Shepherd, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Consumer interest in innovation and regulatory and financial support mean disruptors in the UK have arguably never had better opportunities for success. The key challenge is persuading consumers of their security credentials, despite lacking a history of secure trading Richard Shepherd
Senior Financial Services Analyst

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Table of contents

  1. Overview

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

          • Companies and brands
            • Disruptors benefit from specialist approach
              • Traditional advertising channels remain essential for growth
                • Figure 1: Total above-the-line, online display and direct mail advertising expenditure by selected disruptive brands, 2018/19
              • The consumer
                • Awareness of disruptive brands is highest among younger consumers
                  • Figure 2: Awareness of selected disruptive financial services providers, June 2019
                • Innovative digital services have to start with strong security
                  • Figure 3: Most important features of new online/mobile services in financial services, June 2019
                • Most people have at least some interest in financial services innovation
                  • Figure 4: Interest in new technology in financial services, June 2019
                • Brand has little influence on switching for new digital tools
                  • Figure 5: Likelihood of switching current account for a new online/mobile service, by type of bank offering the service, June 2019
                • Demand for disruption is being held back by wariness of new firms
                  • Figure 6: Attitudes towards financial services disruption, June 2019
                • What we think
                • Issues and Insights

                  • Security concerns hold disruptors back
                    • The facts
                      • The implications
                        • Innovative disruption is welcomed by many
                          • The facts
                            • The implications
                              • Disruptors need to move beyond well-off, young city dwellers
                                • The facts
                                  • The implications
                                  • Companies and Brands – What You Need to Know

                                    • Disruptors benefit from specialist approach
                                      • Traditional advertising channels remain essential for growth
                                      • Competitive Strategies

                                        • Unbundling allows disruptors to focus on quality…
                                          • …but some are moving towards full-service propositions
                                            • Partnerships offer mutual benefits for challengers and incumbents
                                            • Company Profiles

                                                • Bought By Many
                                                  • ClearScore
                                                    • Habito
                                                      • Moneybox
                                                        • Monzo
                                                          • Nutmeg
                                                            • Revolut
                                                              • Starling Bank
                                                                • TransferWise
                                                                  • Trussle
                                                                    • Wealthify
                                                                    • Advertising and Marketing Activity

                                                                      • Traditional advertising channels remain essential for growth…
                                                                        • Figure 7: Total above-the-line, online display and direct mail advertising expenditure by selected disruptive brands, 2018/19
                                                                      • …and television is the preferred media type
                                                                        • Figure 8: Total above-the-line, online display and direct mail advertising expenditure by selected disruptive brands, by media type, 2018/19
                                                                      • Nielsen Ad Intel coverage
                                                                      • The Consumer – What You Need to Know

                                                                        • Awareness of disruptive brands is highest among younger consumers
                                                                          • Innovative digital services have to start with strong security
                                                                            • Most people have at least some interest in financial services innovation
                                                                              • Brand has little influence on switching for new digital tools
                                                                                • Demand for disruption is being held back by wariness of new firms
                                                                                • Awareness of Disruptive Brands

                                                                                  • ClearScore and Monzo are the most recognised disruptive brands…
                                                                                    • Figure 9: Awareness of selected disruptive financial services providers, June 2019
                                                                                  • …especially among consumers who only recognise one or two firms
                                                                                    • Figure 10: Awareness of selected disruptive financial services providers, repertoire analysis, June 2019
                                                                                    • Figure 11: Awareness of selected disruptive financial services providers, by number of companies people have heard of, June 2019
                                                                                  • Awareness is highest in the capital…
                                                                                    • Figure 12: Awareness of any surveyed disruptive financial services providers, by region, June 2019
                                                                                  • …and among younger consumers
                                                                                    • Figure 13: Awareness of selected disruptive financial services providers, by age, June 2019
                                                                                • Important Features for Digital Financial Services

                                                                                  • Security is key to adoption of new digital services
                                                                                    • Figure 14: Most important features of new online/mobile services in financial services, June 2019
                                                                                  • Usability should be central to innovative development
                                                                                    • Figure 15: Selected important features of new online/mobile services in financial services, by generation, June 2019
                                                                                  • Speed and intelligence appeal most to engaged consumers
                                                                                    • Figure 16: Most important features of new online/mobile services in financial services, by interest in new technology in financial services, June 2019
                                                                                  • Londoners stand out for demanding intelligent solutions
                                                                                    • Figure 17: Selection of “Intelligence” as an important feature of new online/mobile services in financial services, by region, June 2019
                                                                                • Interest in Financial Services Innovation

                                                                                  • Most people have at least some interest in tech innovations…
                                                                                    • Figure 18: Interest in new technology in financial services, June 2019
                                                                                  • …but there are clear demographic differences
                                                                                    • Figure 19: Interest in new technology in financial services, by gender, age, area and annual household income, June 2019
                                                                                • Financial Services Disruptors and Current Account Switching

                                                                                  • Brand has little influence on switching for new digital tools
                                                                                    • Figure 20: Likelihood of switching current account for a new online/mobile service, by type of bank offering the service, June 2019
                                                                                  • Consumers are split down the middle on likelihood to switch
                                                                                    • Multiple account holders are the best candidates for switching
                                                                                      • Figure 21: Likelihood of switching current account for a new online/mobile service, by type of bank offering the service and number of current accounts held, June 2019
                                                                                  • Attitudes towards Financial Services Disruption

                                                                                    • Half think the industry is in need of a shake-up
                                                                                      • Figure 22: Attitudes towards financial services disruption, June 2019
                                                                                    • Most are satisfied with digital services, led by Barclays, Nationwide and HSBC
                                                                                      • Figure 23: Attitudes towards existing online/mobile services, by main current account provider, June 2019
                                                                                    • Young urban parents are most interested in product aggregation…
                                                                                      • Figure 24: Preference for managing all financial services products in one place, CHAID – Tree output, June 2019
                                                                                    • …while younger consumers are also most supportive of specialist providers
                                                                                      • Concerns over new providers are highest among dual-parent families with healthy finances
                                                                                        • Figure 25: Concern about using new financial services providers, CHAID – Tree output, June 2019
                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                        • Abbreviations
                                                                                          • Consumer research methodology
                                                                                            • CHAID analysis methodology
                                                                                              • Figure 26: Preference for managing all financial services products in one place – CHAID – Table output, June 2019
                                                                                              • Figure 27: Concern about using new financial services providers – CHAID – Table output, June 2019