Consumer Attitudes to Online Savings

Overview 1
Catalyst 1
Summary 1
Methodology 1
Table of Contents 2
Table of figures 3
Table of tables 4
Introduction 4
Financial Services Consumer Insight: dispelling the myths surrounding online behaviors 4
Understanding consumers' attitudes towards financial services is vital for providers 4
The Future Decoded 4
Trend: Online activity is growing globally 5
Falling technology prices and growing infrastructure are driving growth in all regions 7
Insight: Online savings are now held by 43.9% of consumers with internet access 8
Japan has the highest penetration of online savings 9
All age groups use online savings, but 35-49 year olds account for 37% of all online savers 10
Online banking will not replace traditional methods in the eyes of savers 11
Insight: Consumers registered to use online savings hold a greater number of financial service products 13
Online savers are more active in almost all savings product categories 14
Online savers also hold a greater variety of financial service products 15
Online savers tend to save more, with some notable exceptions 17
Online savers are also more likely to buy other financial service products online 18
Trend: Online savers break the mold 20
Online savers key differentiator is in their attitudes and confidence regarding financial services 21
Online savers are driven by a range of concerns 23
Insight: Online savers are intelligent and nuanced, and are driven by more than just budget concerns 24
Insight: Online savers are comfortable making their own financial decisions 27
Online savers show a preference for free, online financial information 27
Online availability is not a top priority for online savers when making financial decisions 28
Online savers are strongly driven by liquidity concerns 29
Trend: Mobile phone use has surpassed online penetration 30
Insight: Mobile savings activity is subject to regional variations 31
Insight: Mobile savings has the most potential in developing markets 33
Trend: Web 2.0 is being used to push savings 34
Insight: Web 2.0 draws consumers in deeper 35
Dynamic content can help enhance control and functionality 36
Social networks are already being used to drive savings 38
Social media can also prove harmful as disgruntled customers can now reach a wider audience 40
Trend: Security and stability is critical to online savings activity 42
Online savers in countries with high rates of online savings show lower rates of concern 44
Insight: The security and stability of saver institutions is increasingly important to online savers 45
Perceived versus real risks of collapse 46
Insight: Fear of fraud is detrimental to online savings and investment activity 47
Security must be visible without becoming inconvenient 49
Action points 51
Action Point: Integrate online savings and investment with other forms of online financial activity 51
Action Point: Move beyond price and functionality as your unique selling point 52
Action Point: Use mobile banking to reach developing markets 53
The remittance market has strong potential for mobile savings products 53
Action Point: Use Web 2.0 effectively and avoid technology for the sake of it 54
Action Point: Security and stability measures need to be seamless but nonetheless visible 57
Education against fraud and phishing scams will help ease consumer fears 58
Provide seamless, but nonetheless visible security protocols 59
APPENDIX 62
Methodology 72
Further reading 72
Ask the analyst 73
Datamonitor consulting 73
Disclaimer 73
List of Tables
Table 1: Internet penetration by region, 2000-2008 62
Table 2: Internet penetration by country, 2000-2008 62
Table 3: Number of internet users by region as of March 2009 63
Table 4: Share of internet users registered to use online savings 63
Table 5: Share of consumers by country registered to use online savings 64
Table 6: Age breakdown of online savers, 2009 64
Table 7: Consumer attitudes to online and branch banking 65
Table 8: Online registration rates for online saver and non-online savers 65
Table 9: Share of consumers with savings products 65
Table 10: Share of consumers with financial service products 66
Table 11: Average amount saved each month by country ($) 66
Table 12: Share of consumers buying products by type directly from financial service providers 67
Table 13: Share of consumers buying products by type from price comparison websites 67
Table 14: Online registration by consumer and product type 68
Table 15: Share of online savers by consumer type by country 68
Table 16: Online saver, and other consumer, level of education 69
Table 17: Online saver, and other consumer, attitudes to finance* 69
Table 18: Current levels of concern, and future action over savings and investment* 69
Table 19: Factors influencing online savers purchasing decisions* 70
Table 20: Reasons for savings product purchase by share of consumers 70
Table 21: Communication technology penetration by region (per 100 population) 70
Table 22: Arica, mobile cellular subsriptions (per 100 population) 71
Table 23: Level of concern over the security of online banking*, and online savings rates, by country 71
List of Figures
Figure 1: The number of internet users globally has more than doubled in eight years 5
Figure 2: Growth by individual countries shows the scope for growth in the BRIC region in particular 6
Figure 3: There were 1.59 billion internet users globally as of March 2009 7
Figure 4: Nearly 44% of consumers are registered to use some form of online savings 9
Figure 5: Japan has the highest rate of online savings at 72.4% 10
Figure 6: 35-49 year olds are the largest age group for online savings and investment activity 11
Figure 7: Online savers feel more strongly about face to face banking than non-online savers 12
Figure 8: Online savers are significantly more active than non-online savers in other online banking areas 14
Figure 9: Online savers have more savings and investment products altogether 15
Figure 10: Online savers are more active in almost all financial service product categories 16
Figure 11: In most but not all regions online savers save more each month 17
Figure 12: Online savers are likely to buy online direct from companies rather than from comparison sites 18
Figure 13: Online savers are much more likely to use price comparison websites 19
Figure 14: 59% of online savers have at least some university level education 21
Figure 15: Attitudes to finance show online savers are more concerned about their savings 22
Figure 16: Online savers are more likely to act on their concerns, reflecting their greater confidence 23
Figure 17: Conscientious consumers are the most active across all types of online savings 25
Figure 18: Due to their high volume in each market, budget consumers are the largest users of online savings 26
Figure 19: Online savers are comfortable independently researching their savings options 27
Figure 20: Financial stability has become the most critical factor for online savers 28
Figure 21: Nearly half of online savers place a strong emphasis on savings liquidity 29
Figure 22: Mobile coverage is 32 times more prevalent in Africa than fixed telephone lines 31
Figure 23: Since 2000 mobile phone subscriptions in Africa have had a CAGR of 43-44% 33
Figure 24: Real time and rich savings information can help to increase the user experience 37
Figure 25: Smartypig has successfully added social networking to help drive savings 39
Figure 26: Smartypig deposits are forecast to reach $500m by the end of 2009 40
Figure 27: Social networking allows negative images to be spread as easily as positive ones 41
Figure 28: The run on Northern Rock marked a downturn in UK saver confidence 43
Figure 29: All consumers show some concern over the security of online banking 44
Figure 30: Icesave explicitly showed its backing by Landsbanki in an attempt to look stable 46
Figure 31: The professional look of phishing scams fool many online savers 48
Figure 32: Using two-way engagement via Web 2.0 functionality can help personalize a brand image 56
Figure 33: USAA's advertising is explicit regarding the company's lack of a need for a government bailout 57
Figure 34: Messages targeted at the point of fraud are likely to have a stronger impact on consumers 59
Figure 35: High visibility airport security helps act as a deterrent while reassuring passengers 60