Internet Selling in Financial Services - UK: Industry Research Report

Internet Selling in Financial Services - UK

Published Date: February 2006

Published By: Mintel International Group Ltd.

Page Count: 143

Order Code: R560-1910

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Introduction and Abbreviations: Mintel’s consumer research; Market context; Key sources; Global information and research; Consumer research; ACORN; Abbreviations
Executive Summary: Background; The main findings of Mintel’s consumer research; Determining the size of the online account customer base; Ranking the main protagonists; Assessing online buying activity; Segmenting the Internet base; The Internet encourages consumers to compare prices; Attitudes towards other channels...; ...and use of aggregator sites; The main advantages of banking and buying online; Factors which would persuade more consumers to migrate to the Web; Market outlook
Market Dynamics: Market Drivers; Internet penetration; Online access determined by technology take-up; Demand drivers - a matter of convenience; Over a fifth of Internet users say buying online makes their life easier; 25-44-year-olds are prime targets for Internet sales; Market Barriers; Lack of access; Technical issues; A problem with awareness, perhaps?; Fear of fraud and online scams; Common security threats; Customer responsibilities; Banks strengthen security procedures and seek to educate consumers of the risks; Under the spotlight 1: Lloyds TSB’s measures to combat fraud; Ecommerce regulation; UK law; Other legislation
Market Developments and Innovations: Banking; Background; The future of standalone Internet brands; Internet and call centre technologies are converging; On the move with mobile Internet banking; Account aggregation; Personal Loans and Credit Cards; Online credit cards; Anti-card fraud initiatives; Mortgages; Problems with online relevance; Optimising the power of search engines; Under the Spotlight 2: Standard Life Bank’s Freestyle mortgage range; General Insurance; The Internet is less effective at up-selling extras; The fight to the top; Greater functionality; Complementing (or competing with) other direct channels?; Investments; An evolving marketplace; The pros and cons of online share dealing; The market is experiencing increasing consolidation; Online trades now account for at least half of all execution-only trades; Fund supermarkets; Pensions; Using the Internet to galvanise interest and raise confidence
Online User Profile: The Internet is ideal for targeting the more affluent and financially active; Sending and receiving email is top online activity; The Internet has made pre-purchase research much easier; Travel sites are the most popular destinations for online browsers; Online bank accounts and general insurance sites attract an increasing proportion of potential buyers; For other areas of finance, the Internet remains a niche sales channel; Balance enquiry is the top financial activity executed online
The Consumer and Online Account Penetration: Nearly a fifth of adults are heavy Internet users; One in four adults have an online current account; Online account ownership rises with frequency of Web use; Mortgage holders are most keen on Internet access; ABs and full-time workers strongly favour online access; Singletons are just as likely to log on as couples; Income is an enabling factor; Broadsheet readers and Waitrose shoppers record high take-up; The Internet is highly effective at attracting the more affluent groups; Under the spotlight 3: ING Direct’s online achievements; CHAID analysis; What is CHAID analysis?; The main target groups identified; Around one in ten consumers have three or more financial products registered online; ABs have the greatest tendency to hold multiple online finance accounts; The big five banks have the largest Internet account customer bases; Four in five customers of the Internet banks are ABC1s...; ...and hold the broadest range of online accounts; RBS/NatWest benefits from the biggest concentration of ABC1s
Industry Views: Internet Banking; What does the future hold for standalone Internet brands?; And what’s the next major development phase?; Selling Insurance Online; High marketing costs make it difficult for smaller operators to compete with the big brands; Selling online the Direct Line way
The Consumer and Online Purchasing Behaviour: Motor insurance is the best online seller; A small proportion of ‘non-users’ have arranged insurance online; One in eight have bought multiple financial products online in the past year; Motor insurance is often the first financial product purchased online; Heaviest users are more inclined to buy multiple finance products online; 16-34-year-olds are twice as likely as the overall population to apply online for a credit card; Some consumers have bought an insurance policy over the Web but have yet to migrate their current account online; Online credit card customers are key cross-selling targets; Most online users have used the Web with regards to some part of their finances; Two thirds of Internet users say they are more prone to comparing prices online; Half of those who have bought a financial product via the Web are in favour of renewing online; Some two thirds of Internet users aged 25-34 want to renew/amend their insurance policies online
Consumer Attitudes and Behaviour: Internet banking may be a natural progression from telephone banking; Cluster analysis; Cross-analysis shows that Online Buyers are aptly named; One in five people aged 45-54 are Potential Converts; Marketing to Potential Converts and Keen Talkers; The southern regions, bar London, have a significant share of Online Buyers; Four in five Kwik Save shoppers are Outside Net; Open 24/7 is a major plus...; ...but buying financial products online is not perceived generally as ‘fun’; The ability to access services from anywhere will curry favour among frequent/long-haul travellers; Online account holders rank the benefits somewhat differently; ABs want convenience, C1s look for price advantages and C2s like to avoid sales pressure; Security is the number one concern...; ...and particularly for medium-to-heavy Internet users; Major target groups are most anxious about online security; Further analysis
Advertising and Promotion on the Web: Internet adspend comprises a small proportion of overall industry expenditure; Under the spotlight 4: Norwich Union’s online advertising push; Loan and credit card providers are among the heaviest online advertisers; Assessing the effectiveness of online versus offline advertising
The Future: Internet penetration will continue to grow; Online banking will become increasingly mainstream; The Internet has increased price competition...; ...but big brands will help to stabilise the motor insurance market; Internet sellers will seek to improve conversion rates...; ...by educating consumers about how to protect themselves...; ...offering user-friendly and streamlined processes...; ...and giving greater focus to branding; Technical innovation moving mobile; And finally...

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