RFi Group Insight - UK: Live Chat services and UK Consumers, A Gap in the Market?

In the past, a major barrier to consumer adoption of online services has been their concern about the inability to ask questions. Over the last few years, institutions across industries, including financial services, telecommunications, and utilities, have attempted to overcome this issue by introducing live chat services to their digital platforms. Live chat services allow customers to use an instant messenger tool to have a text conversation with a representative of the service provider. The representative could be a real member of staff or a virtual assistant (VA). Using such services allows banks to scale back branch and call centre operations, while also tapping into a communications channel many consumers use in their day to day lives, with popular tools such as Facebook Messenger and WhatsApp. RFi Group data shows that many consumers in the UK are already using live chat services for a limited range of functions in financial services and that appeal of live chat is high. This suggests that there is the potential for expansion of such services into more complex interactions and products.

RFi Group data shows that two out of five UK consumers are already using live chat services. Retailers lead the way in attracting live chat use, with 17% of consumers having used a live chat service with a retailer and financial institutions are not too far behind, at 16%.

"Where we stand today shows a high volume of UK consumers using live chat services, at 40%."

There is an opportunity in the UK toencourage more use of live chat services as RFi groupdata shows a high proportion of consumers likelihood to adopt such services. 83% of UK consumers who don’t currently use live chat for banking, state that they would be likely (6+ out 10 on a scale of 0 to 10) to live chat with a member of banking staff to complete banking tasks and 45% would be likely to live chat with a VA. Combining the proportion who already use live chat for banking, with those who would be likely to do so, it can be seen that 71% of UK consumers could potentially adopt live chat services, demonstrating the massive potential for this channel. What is also clear from current usage and potential adoption is that consumers are much more likely to use live chat if it is managed by a real person (or perhaps a very convincing VA!)

When looking at what tasks consumers would do via live chat, complaint resolution and query handling come out on top. Currently, 64% of UK consumers are likely to use a live chat service to resolve a complaint and 63% would be likely to use it tomake enquiries. This suggests that introducing consumers to live chat tools through query and complaint handing would be the best introduction tactics. Likely services to expand into next would be balance checks and transfers, with 49% and 47% of consumers likely to perform these tasks using live web chat, respectively.

"Although adoption of live chat services in the UK has been strong, awareness is still a key barrier to wide spread adoption. In total, only 21% of those who don’t currently use live chat services with a financial institution say they are aware that financial institutions offer these services at all."

Although adoption of live chat services in the UK has been strong, awareness is still a key barrier to wide spread adoption. In total, only 21% of those who don’t currently use live chat services with a financial institution say they are aware that financial institutions offer these services at all. Even among main financial institution customers of the ‘Big 5’ high street banks, four of which offer live chat services, only 23% were aware of live chat services. Therefore, a focus on building awareness could be a key strategy for banks in encouraging the growth of this service.

Live chat services clearly represent a huge opportunity for banks and financial institutions. For financial institutions looking to introduce such tools, initially focusing them on complaint and query handling will help drive the greatest use. This approach will be most likely to increase consumer familiarity with the tools and allow them to eventually be used for more complex tasks such as balance checks and transfers. Also, in the early stages of introducing these tools, ensuring consumers have access to a real person may be the best option, or at least making them feel as they do, as the appeal of using live chat with a VA is much lower. Over time, this may change as consumers become more familiar with using live chat tools with service providers. Overall, the high levels of appeal for these services show that investing in live chat services would be a good strategy for financial institutions, especially if consumers can be eased into their use over time.

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