Amazon and PayPal more trusted amongst younger generation than banks to hold their personal data
- - 18-24-year-olds trust Amazon and PayPal above banks, to ensure the privacy and security of their personal information.
- - Keeping information secure is the top concern for consumers when considering allowing access to their data.
- - A very low proportion of UK consumers (9%) are dissatisfied with their provider’s existing digital banking capabilities.
- - There is high appetite among UK consumers for new services that PSD2 and open banking legislation will potentially allow; 1 in 4 are likely to use a payments initiation services and 1 in 3 are likely to use an aggregation service.
- - 1 in 3 consumers claim to share personal information with apps, yet 7 in 10 consumers use apps that require the sharing of some kind of personal information
London, UK, 1st June 2018 – Latest research from global FS intelligence specialist, RFi Group, shows that Amazon, PayPal, Mastercard and Visa are viewed as more trustworthy than the banks for the younger millennials in the UK when it comes to personal data security.
RFi Group’s Winning the post-PSDII & Open Banking Customer study showcases that while awareness around PSD2 and Open Banking is low, at only 3% and 16% respectively, when asked who they trust to manage their personal and financial data, younger millennial UK consumers see some of the larger technology companies as better than or equivalent to their traditional banks. The report additionally shows that keeping information secure is the most important factor for consumers when deciding with whom to share their data.
On the other end of the scale, tech giant Facebook did not fare well, with 77% of UK consumers stating that they distrust this entity to hold and maintain the privacy and security of their data. This shows the immediate impact of the Cambridge Analytica data breach, as the study went into field just after this story hit the headlines. Third-party apps that manage finances and new/emerging technology companies were also in the bottom three in terms of consumer trust, suggesting that the players hoping to gain the most from more access to data will have to work the hardest to win over the consumer.
Charles Green, CEO, RFi Group comments “At an overall consumer level, from a trust-scale point of view, banks are in the lead by a small margin. However, PayPal, Amazon and the card schemes are very close behind, and are winning for younger millennials. As the report shows that consumer behaviour will continue to be dictated by who they trust and distrust, the threat from Facebook can most likely be discounted, however there should be concern around what PayPal and Amazon might do. Traditional banks should be thinking specifically about what those brands have done to earn consumer trust.”
The report sheds light on why these types of organisations are trusted by consumers. Firstly, the proliferation of use amongst younger consumers for brands such as Amazon and PayPal, particularly in making payments, means that as long as they are not let down by these brands, they have a degree of comfort to potentially extend into other types of services. The schemes benefit also from not letting the customer down but from invisibility. Consumers state comfort with Visa and Mastercard as they exist in the background and do not bombard them with products and services.
Alongside information security, the most important drivers in breeding comfort for data sharing are brand presence and longevity. These three factors continue to be the biggest hurdles for the FinTech community. However, the report shows a disconnect between awareness of data sharing and actual data sharing, with fewer than 1 in 3 consumers claiming to share personal information with apps, but with 7 in 10 consumers using apps that require the sharing of some kind of personal information. This suggests that trust in lesser known third parties may be less of a barrier if the proposition is compelling enough.
Unlike a lot of disruption in financial services to date, which has been focused on existing pain points for consumers, the findings show that the biggest opportunities are in new value-added services. 7 in 10 UK consumers say that they find their everyday banking services very easy to use, and 91% are satisfied or very satisfied with their current digital or mobile banking offering.
Green continues, “Ultimately, the biggest opportunity is not going to arise purely from harnessing dissatisfaction, it is going to be in the offering of new and compelling market propositions. When exploring specific banking tasks, some of the biggest opportunities to delight customers will be through simplifying product applications, helping consumers avoid feeds, moving money more easily between accounts of different providers, budgeting and financial management tools.”
The study shows that 1 in 4 consumers found the concept of using payment initiation services appealing and the most likely service to use in the future. There was also strong appetite for third parties to access their account information for a range of other services, broadly related to avoiding fees, avoiding fraud (enabling consumers to be alerted to something untoward happening to their account for example) and financial optimisation, which included highlighting ways for consumers to receive better rewards, advice on getting the best from their money and notifying of lower cost services such as electricity and gas bills. Some differences arose across demographics, most significantly amongst millennials where P2P payments were comparatively popular.
On Wednesday 13th June, RFi Group will release an episode of their podcast, Global Digital Banker, which highlights more trends from the study, as well as features interviews with thought leaders within financial services on the topic.
Sarah Hollinshead, Group Head of Content, RFi Group
firstname.lastname@example.org, +44 203 862 2140
About RFi Group
RFi Group is a global financial services strategic insights partner. It specialises in evidence-based insight generation and business decision support for the world’s leading financial service providers. Its aim is to combine global intelligence and local knowledge to provide insightful, valuable and actionable recommendations, with a core focus on the provision of exceptional client service.
About the Winning the post-PSDII & Open Banking Customer study
The Winning the post PSD2 & open banking customer study was fielded in the UK in April 2018. In total, over 2,000 consumers were interviewed online. Survey respondents form a nationally representative sample of the banked population. Basic quotas were applied to ensure that respondents are representative of the banked population by age, gender, region and income. To qualify as ‘banked’ respondents must hold a minimum of one banking product with a financial institution in the UK. Where appropriate, significance testing at the 95% confidence level has been conducted. Significant differences have been marked throughout the report. Results have a margin of error of ±2%. For single response questions, totals may not add up to 100% due to rounding, while for multi-response questions, totals do not add to 100% as respondents could choose more than one response.