Consumers are increasingly looking for financial services providers that are embracing technology, turning to digital and mobile payments, a new survey has found.
The study, by Fujitsu, showed that more than a third of consumers would leave their provider if they didn’t offer more up to date technology, with 32 per cent of those surveyed using mobile device payments and 22 per cent using wearable technologies. Across Europe, online banking remains the most popular channel, with three quarters of customers using it once a week or more.
"Banks have no option but to embrace change," said Anthony Duffy, senior banking technology consultant with Fujitsu UK and Ireland, noting how revenue at traditional banking institutions had fallen since the days before the economic crash.
“Doing banking as we have in the past 20 years isn’t going to be possible going forward,” said Mr Duffy. “The digital revolution has come along at the right time.”
Driving this adoption of technology is the the smartphone, as people become more confident using the technology.
“People just started to recognise the convenience factor digital banking offered,” said Mr Duffy.
Banks themselves are also taking advantage of the shift, pushing people to use alternative channels such as smart ATMs and deposit machines in branches.
"Digital is transforming each and every aspect of society and this has irrevocably changed consumer behaviour. Today's customers are no longer guarded and conventional," said Francois Fleutiaux, Senior Vice President, Head of Country Leadership, EMEIA, Fujitsu. "Modern day consumers are ready and willing to embrace innovation when it makes interaction more convenient."
Already in Ireland, there have been some “digital only” banks offering services to customers. But Mr Duffy said competition shouldn’t be new to Ireland’s traditional players, who are seeing supermarkets and other providers begin to offer insurance and other services to customers.
“If traditional banks want to stay in business they will have to compete and reinvent themselves,” he said.
Consumers are also more willing to buy extra services from their financial providers, the survey found, with a third open to buying energy for their home from their bank or insurer, while a similar number would also consider purchasing personal data storage from the institutions, and 30 per cent would buy broadband.
That goes both ways though; with a fifth of consumers willing to buy their banking or insurance services from companies such as Google, Amazon or Facebook.
However, Irish people are still reluctant to move away from the established service providers. Traditional channels shouldn’t be written off either. On a Europe-wide basis, 34 per cent of people said they visit their bank branch weekly, and 36 per cent use phone banking, leading to the conclusion that digital is simply another way to communicate for consumers.
The survey questioned 7,000 consumers from across Europe.
About a fifth of those surveyed said they used cryptocurrencies, but that high figure was driven by Eastern European countries, where 44 per cent said they used it.
Although much has been made of cryptocurrency such as Bitcoin in recent years, Mr Duffy said he didn’t think it would gain widespread adoption in the short term. Instead, the blockchain - the technology that underlies Bitcoin - could be more relevant as banks begin to look at the technology.
One area that looks set to evolve, however, is canticles payments as services such as Apple Pay and Samsung Pay allow people to use their phones and smartwatch to pay for goods and services.
“I think organisations like Apple and Samsung getting involved significant gives the mechanism a credibility,” he said.
However, the majority of contactless payment are still done through cards, especially in Ireland where Apple and Samsung have yet to launch their payment systems. The chief driver of adoption has been the lifting of the limit on transactions to €30, allowing contactless payments to be used for a wider range of transactions.
