New research shows that Internet banking has caused a dramatic shift in financial management behaviour and that most consumers now use the Internet as their primary medium for conducting financial management tasks.
The study was commissioned by Yahoo! and OgilvyOne Worldwide to examine the Internet's impact on financial management behaviour, and how consumers' attitudes about their finances have been affected. The research, which includes both quantitative and qualitative insights, was conducted by Forrester Research and Flamingo International.
Greater empowerment
According to the findings, the Internet gives consumers more control over their finances and gives them the confidence to make financial decisions on their own, creating a greater sense of empowerment. With this "do-it-yourself" mentality, financial consumers are turning online for activities that were previously conducted in-person, through the mail or over the phone.
Approximately half of all respondents (48%) believe that the Internet gives them greater control over their money and finances, and 74% of respondents who do their banking online said the ability to regularly view their account balances and transactions online makes them feel more in control of their finances. In addition, 39% said that online information enables them to make better financial decisions.
Easier to switch
Consumer empowerment has also significantly affected loyalty to providers because consumers are more comfortable switching financial providers if they are not satisfied. One-third of respondents said the Internet makes them feel more empowered to switch financial providers if not satisfied, and 26% said the process of switching financial providers is now easier.
Key findings
Among the key findings was that the Internet has become the leading outlet for monitoring financial activity, as nearly two-thirds of respondents (64%) now check their bank accounts balances primarily online, and more than half (56%) use the Internet as their primary medium for checking their investment portfolios.
Financial management has also shifted to the Internet, as the percentage of respondents who pay their bills primarily online (43%) has become equal to the percentage of respondents who pay their bills through the mail.
In addition, half of all respondents (50%) now trade investments primarily online, while only 15% of respondents still primarily trade investments in person, which was historically the leading method for trading investments.
According to Andy Jones, senior partner and head of planning, OgilvyOne New York: "As marketers, we need to demonstrate superior understanding of our target consumer's needs and sharpen the message if we are to drive incremental behaviour."
Catch them early
The study also found that consumers add financial products throughout the earlier stages of their lives, and thus should be reached at the point when they are making these decisions. Once a consumer's need for financial products levels off, there is less potential for financial marketers to reach that consumer.
For additional information:
· Visit Yahoo at http://docs.yahoo.com/docs/pr/financeresearchfactsheet.doc
· Visit OgilvyOne Worldwide at http://www.ogilvy.com/o_one