Efma Report

ONLINE FINANCIAL CUSTOMER BEHAVIOUR IN EUROPEONLINE FINANCIAL CUSTOMER BEHAVIOUR IN EUROPE

The Internet TsunamiThe Internet Tsunamibased on the forthcoming reportbased on the forthcoming report

by by EfmaEfma, , NovamNovaméétrietrie, , CrCrééditdit AgricoleAgricole, ,

Microsoft, Microsoft, CapgeminiCapgemini

Barcelone, 29 November 2007


22ndnd annual report annual report Online financial customer behaviour in EuropeOnline financial customer behaviour in Europe

Annual online surveyConducted by Efma with Novamétrie, Microsoft, Capgemini& Crédit Agricole, 50 online finance experts4,836 online finance users – visiting a bank’s or insurer’s site once a month or more often 6 countries (proportion of online finance users)• Italy (1/5) • France (1/4)• Spain (1/4)• The Netherlands (1/3)• The UK (1/3) • Sweden (1/2)


Financial services experts expect online sales of Financial services experts expect online sales of financial products to double and reach 30% in 2011financial products to double and reach 30% in 2011

22%

47%

18%

42%

14%

36%

12%

22%

9%

16%

6%

17%

0%

10%

20%

30%

40%

50%

Sweden UK Netherlands France Spain Italy

2007 2011


Impact on branchnetwork

Decrease in number of branches

Decrease in branch size

•Yes•50%

•No•50%

•No•87%

•Yes•13%

•No•69%

•Yes•31%

Experts estimate that online sales have Experts estimate that online sales have no major impact on the branch networkno major impact on the branch network


Source ofinformation

Sales channel

Experts increasingly see the Net as a sales channelExperts increasingly see the Net as a sales channel

Completely53%Quite

32%

Not really15%

Completely79%

Quite17%

Not really4%


Over the past 12 months, did you subscribe online any of the following financial products?

Online banking users claim they bought more Online banking users claim they bought more financial products online in 2007financial products online in 2007

Bestsellers vary from one country to the next:

Non-life insurance, current accounts, investments andcredit cards most popular

24% 25% 23%

15%

32%30%

25% 23%

15% 14%

5%

33%

37%

15%

32%

7%10%

8% 9%

2007

Car &

Hom

e

insur

ance

Curre

nt a

ccou

ntIn

vestm

ents

Cred

it ca

rd

Debit

card

Savin

gs a

ccou

ntHe

alth

insur

ance

Cons

umer

cred

itLif

e ins

uran

ceMor

tgag

esRe

volvi

ng cr

edit

2006


Which products look the most attractive for full online subscription, including electronic signature?

Online users say nonOnline users say non--life insurance and current life insurance and current accounts are attractive products to buy onlineaccounts are attractive products to buy online


Investments Life insurance

Consumercredit

Mortgages

37%

63%

Car & homeinsurance

Current account

Credit card HealthInsurance

Subscription

Attractiveness

33%

63%

31%

55%

15%

49%

32%48%

12%

45%

16%

40%

10%

30%

Δ=34%

Δ=20%

Δ=27%

Δ=24%

Δ=16%

Δ=30%

Δ=33%

Δ=24%

Δ=Attractiveness/Application

The gap between attractiveness and The gap between attractiveness and actual online subscriptions shows strong potential actual online subscriptions shows strong potential


When it comes to motor or home insurance, would you like to buy them onlineand have you done so in the past 12 months?

Car and home insurance are most popular Car and home insurance are most popular online purchases online purchases -- specially in the UKspecially in the UK


When it comes to mortgages, would you like to buy yours onlineand have you done so in the past 12 months?

Even mortgages are far more popular onlineEven mortgages are far more popular onlinethan bankers generally believethan bankers generally believe


Local variations in online product sales Local variations in online product sales depend on availabilitydepend on availability

1. Investments2. Car & Home ins3. Debit card

1. Current account2. Investments3. Credit card

1. Current account2. Credit card3. Debit card

1. Car & Home ins2. Credit card3. Current account

1. Investments2. Car & Home ins3. Current accont

1. Current account2. Health insurance3. Car & home ins


What are your sources of information before subscribing a financial product?

80% check their bank’s site

first!

The Net is preferred by 89%

Internet is the preferred source of information Internet is the preferred source of information when researching financial products when researching financial products –– by farby far


What are the three main reasons why you browse the internet before subscribing a financial product?

Increased price focus:

58% look for better deals

(+26%)

Time saving, product comparisons and wealth of Time saving, product comparisons and wealth of information are top reasons for researching onlineinformation are top reasons for researching online


Before subscribing a financial product or service,How do you make up your decision?

Prefer to make decision

alone 57%

Prefer to make decision

alone 65%

Online finance users are increasingly selfOnline finance users are increasingly self--directeddirected


When it comes to subscribing online , in which category do you feel you are?

Prefer to do

maximum online 39%

Prefer to do

maximum online 55%

And increasingly committed to the online channelAnd increasingly committed to the online channel


The selfThe self--directed largely dominate directed largely dominate among online finance usersamong online finance users

83%

17%

64%

35%

1%

72%

26%

2%

50%49%

1%

60%

38%

2%

62%

37%

1%

Self-directedValidatorDelegator


A majority of committed Net users A majority of committed Net users want to do a maximum onlinewant to do a maximum online

69%

23%

5%

3%

62%

24%

7%

7%

58%25%

4%

13%

31%

52%

11%6%

52%

32%

11%5%

54%34%

8%

4%

MaximalistMostly researcher

Not readyNot interested


Proportion of internet users who claim both that they are self-directed and that they would rather perform the maximum online when purchasing a financial product or service

5% of French

consumers

20% of all UK

consumers

SelfSelf--directed directed andand committed online userscommitted online usersare ready to byare ready to by--pass branchespass branches


Would you say that the internet is transforming your relation with your bank and that it allows you to...

Online finance users expect fewer Online finance users expect fewer & more efficient in& more efficient in--person interactionsperson interactions


Satisfaction with online finance is increasing Satisfaction with online finance is increasing ––but there is room for improvementbut there is room for improvement

8.21

8.09

7.96

7.47

7.32

7.08

6.98

6.68

6.61

6.53

7.73Overall satisfaction

Security

Reliability

Availability

Home page

Ease of use and navigation

Application facilities

Wealth of information

Product attractiveness

Ability to call or be called by an adviser

Decision support tools

0 1 2 3 4 5 6 7 8 9

2007

2006

On a scale from 1 to 10 where 1 is not at all satisfied and 10 very satisfied, how satisfied are you with you online banking site?

Main security concern is, for 31%, online

fraud


83%

17%

Not satisfied

Satisfied

85%

15%

89%

11%

84%

16%

87%

13%

88%

12%

Online finance users are also satisfied Online finance users are also satisfied with their adviserwith their adviser


Segmentation reveals differences Segmentation reveals differences in online banking usersin online banking users’’ appetite for online purchaseappetite for online purchase

55%

3%

11%3%

4%

18%

6%

28%4%

6%

22%

9% 18%

13%28%

8%3%

14%

9% 22%

16%

32%

4%

6%

12%7%

24%

15%

France Spain

UK Netherlands

3%

11%3%

4%

•45%

24%

27%

24%

Italy

Sweden

3%4%

11%7%

11%

23%


Which of the following services would help you buy financial products online?

Online users are willing to receive mail or calls Online users are willing to receive mail or calls regarding financial products of interest to themregarding financial products of interest to them


The high expectations of online users affect the The high expectations of online users affect the entire entire multichannelmultichannel experienceexperience

Online finance users are more bullish about the Net than bankers and insurersOnline sales popularity varies along with offerings –laggards like France are digging themselves into a hole By failing to add value, providers let the self-directed, committed online users focus on priceThis critical mass of customers ready to bypass the branch require more performing account managers Multichannel integration is key to upselling through personalized offerings online or on the phone


Most effective

Effective

Least effective

• Remote access to product expert

• Instant messaging with account manager

• Free and instant call back

• Personalized email or newsletter

• Personalized alerts

• Video product presentation• Site personalization

• Online promotions • Auctions

Experts recommend Experts recommend multichannelmultichannel tools tools


Dr Therese Dr Therese TorrisTorrisProgramme DirectorProgramme Director

EfmaEfma16 rue 16 rue dd’’AguesseauAguesseau -- 75008 Paris 75008 Paris -- FranceFrance

Tel: +33 1 47 42 69 76Tel: +33 1 47 42 69 [email protected]@efma.com

mailto:[email protected]


Main ConclusionsMain Conclusions

Internet is increasingly a sales Internet is increasingly a sales channelchannelCar & home insurance most popular products onlineOnline finance users are more Online finance users are more and more selfand more self--directeddirected89% of online finance users see the Net as their main source of information for financial products – against 77% a year ago55% of online finance users claim to be self-directed – against 39% a year ago

Users trust their online bankUsers trust their online bank’’s s securitysecurityBut fear of fraud is a concernOnline finance users have fewer, Online finance users have fewer, but more meaningful interactions but more meaningful interactions with their account managerwith their account manager76% of online banking users claim to see their account manager less oftenPrice focusPrice focus58% of Internet users browse the Web for better deals – against 32% only one year ago

Technology

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