The Connectivity Consumer Trend in Financial Services: The New Community

Introduction

Consolidating relationships with consumers is now essential, following widespread disengagement with financial services as a result of the global economic downturn. This report explores the role of social media and how it can help FS providers to establish their position in the community.
Features and benefits

* Enhance product design by better understanding consumer attitudes to social media.* Increase consumer engagement and retention through clear, actionable strategies* Stay alert to the fast paced social media landscape by learning from best practice examples within the FS industry* Sculpt regional strategies by utilizing country level analysis and insight
Highlights

Spanish consumers exhibited the highest demand for Connectivity within Europe. Spanish consumers were also one of the least engaged set of consumers. The opportunities for using Connectivity's sub-trends as a means of re-engaging with Spanish consumers are therefore significant.Consumers want to see their FS providers embracing new technology but are not yet dissuaded by a failure to utilize social media. Consumers want to see that their FS providers are staying ahead of the curve and are looking to ensure that consumers are always presented with the most convenient means of conducting their FS activities.Only one in every 10 consumers currently views access to their bank through social media to be important. Consumers are not yet used to seeing social media in the FS sphere, and are not demanding it as part of the core package of services
Your key questions answered

* What are the opportunities for FS providers to use social media and the implications for the wider FS industry?* What is an FS provider's place in the emerging digital community?* How is the consumer relationship with their physical communities playing a role in FS providers’ interactions with customers?* How important are interpersonal recommendations in choosing FS products?* How should these developments be reflected in the design of new products and services?

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Executive Summary
The financial services landscape has changed post-downturn
A holistic view of consumers must be adopted
Tracking consumer trends is fundamental to long-term success
The Connectivity Megatrend is about interactions and relationships
The Connectivity Megatrend is comprised of key trends
Rebuilding and enhancing relations with consumers is essential for FS providers
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New connective technologies will be pivotal to managing relationships and community involvement
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Ethical consumerism is on the rise as consumers reflect on their place in the wider community
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Curated consumerism will continue to rise with connective technologies
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Action points
OVERVIEW
Catalyst
Summary
Methodology
INTRODUCTION: THE IMPORTANCE OF TREND TRACKING TO FINANCIAL SERVICES
The post-recessionary financial services market presents new challenges for the industry
A microscope has been placed over the activities of the financial services community
Competition is fierce from within the industry and from new entrants
Consumer empowerment means providers must work harder then ever to attract and retain customers
Competing on price alone does not build profitability
Datamonitor is committed to creating a holistic view of 'the consumer'
Tracking consumer Megatrends is fundamental to long-term success
Megatrends can be classified in two ways, according to desirable product/service benefits or societal complexities
Megatrends can be broken down into trends and sub-trends, to provide structure and clarity at a time of ‘information overload’
Adopting a broader, global perspective to trend tracking facilitates better decision-making by overcoming myopia
Trends have greater longer-term implications than fads
For every trend there is a ‘counter-trend’, while ‘trend-crossover’ is also an important phenomenon
Trends are aligned with pre-existing but evolving human values, attitudes, needs and behaviors
The Megatrends have different levels of importance for consumers across the globe
The influence of Connectivity will increase over time
THE FUTURE DECODEDTHE CONNECTIVITY MEGATREND IS ABOUT INTERACTIONS AND RELATIONSHIPS
The Connectivity Megatrend is comprised of key trends
TREND: Rebuilding and enhancing relations with consumers is essential for FS providers
Wasted opportunities: Nearly a third of consumers are disengaged from the FS industry
Banks have an opportunity to remove the stain of the financial crisis by changing the way they interact with consumers
INSIGHT: FS providers must ensure that they account for regional differences and attitudes when implementing customer-centric strategies
Asian growth economies are the most receptive to the message of Connectivity
Spanish banks suffering from poor engagement must look outside traditional methods to reconnect
Connectivity is much weaker in Asia Pacific and Europe
INSIGHT: Connectivity is most important to younger consumers, who are still seeking their place in the community
INSIGHT: Consumers seeking Connectivity are time scarce and economically active
TREND: New connective technologies will be pivotal to managing relationships and community involvement
Nearly half of consumers globally are urging their FS providers to embrace new technologies
Few consumers currently view social media access to be important but attitudes will swiftly change
FS providers must be sensitive to geographic differences in the role of social media
INSIGHT: some consumers are not ready to invite their FS provider into their world and will respond negatively to unexpected guests
INSIGHT: social media is a marketing channel, not a magic wand
INSIGHT: Viral marketing presents insurers with an opportunity to save money on advertising spend while crucially developing brands in a largely commoditized space
Insurers face an uphill struggle in maintaining their brand
INSIGHT: FS providers can now offer consumers a direct involvement in creating and developing new products
First Direct shows that customer interaction can begin with product development
Social media can provide FS providers a clearer vision of their consumer
INSIGHT: social media offers FS providers information capabilities that must be used carefully if consumers are to be kept onside
Social media allows lenders to profile consumers against their peers and to better evaluate their credit risk
TREND: ethical consumerism is on the rise as consumers reflect on their place in the wider community
INSIGHT: FS providers must rebuild brand integrity if they are to tap into the Connectivity Megatrend
FS providers must prove that they can be a force for good before they will be welcomed into the community
The majority of BRIC and South African consumers demand green financial services
INSIGHT: FS providers must offer products that celebrate values consumers are proud to support
INSIGHT: the power of socially responsible lobby groups is rising and companies are being forced to pay heed
INSIGHT: consumers will not accept ‘green-washed’ financial services
FS providers must show that they empathize with the community they wish to join
TREND: ‘Curated’ consumerism will continue to rise with connective technologies
Consumers consult their peers before making FS decisions
INSIGHT: Consumers will look to their peer group for reassurance that they are making the right move
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ACTION POINTS
ACTION POINT: FS providers should look to market lifestyles rather than advertising specific products
ACTION POINT: Social media is a cost effective means for FS providers to convey their message to the consumer
Insurers must tap into the potential of viral marketing to improve margins
Pension providers must use the power of social media to help instill the importance of message from a young age
ACTION POINT: FS providers can truly interact with their consumers through hosting conversations and supporting consumers' aspirations
First Direct provides the benchmark for customer interaction in the UK
FS providers must host the conversation if they are to respond to it
ACTION POINT: to genuinely interact banks must turn branches into communities
Regional banks have an advantage in creating an authentic community
ACTION POINT: Engagement will be badly damaged if FS providers mishandle customer information
APPENDIX
Additional data tables
Definitions
The Datamonitor Financial Services Consumer Insight Megatrend Framework
Methodology
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer

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