Efma Report

ONLINE FINANCIAL CUSTOMER BEHAVIOUR IN EUROPE

The Internet Tsunami
based on the forthcoming report

by Efma, Novamétrie, Crédit Agricole,
Microsoft, Capgemini

Barcelone, 29 November 2007


2nd annual report
Online financial customer behaviour in Europe

Annual online survey
Conducted by Efma with
Novamétrie, Microsoft, Capgemini
& Crédit Agricole,
50 online finance experts
4,836 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 products to double and reach 30% in 2011

47%
50%
42%
36%
40%

30%
22%
22%
18% 17%
16%
20% 14%
12%
9%
6%
10%

0%
Sweden UK Netherlands France Spain Italy

2007 2011


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

•Yes
•13%

•No
•87%

Decrease in number of branches
•No •Yes
•50% •50%

•Yes
•31%
•No
•69%

Impact on branch
network
Decrease in branch size


Experts increasingly see the Net as a sales channel

Not really
4% Not really
15%
Quite
17%

Completely
Quite 53%
32%

Completely
79%

Source of Sales channel
information


Online banking users claim they bought more
financial products online in 2007
Over the past 12 months, did you subscribe online any of the following financial products?

Bestsellers vary
from one country to the next:
Non-life insurance, current
37%
accounts, investments and
33% 32% 32%
credit cards most popular
30%
24% 25% 25% 23% 23%

15% 14%
15% 15%
10%
8% 9% 5%
7%
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2007
2006


Online users say non-life insurance and current
accounts are attractive products to buy online
Which products look the most attractive for full online subscription,
including electronic signature?


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

63%
63%
55%
49%
37% 33% 31%
15%

Δ=27 Δ=30 Δ=24 Health Δ=34
Current
Car & home Credit card
% % % Insurance %
account
insurance

48% 45% 40%
32% 30%
16%
12% 10%

Mortgages
Consumer
Δ=16 Δ=33 Δ=24
Investments Life Δ=20
credit
% % %
insurance %

Δ=Attractiveness/Application


Car and home insurance are most popular
online purchases - specially in the UK
When it comes to motor or home insurance, would you like to buy them online
and have you done so in the past 12 months?


Even mortgages are far more popular online
than bankers generally believe
When it comes to mortgages, would you like to buy yours online
and have you done so in the past 12 months?


Local variations in online product sales
depend on availability

1. Investments 1. Current account 1. Current account
2. Car & Home ins 2. Investments 2. Credit card
3. Debit card 3. Credit card 3. Debit card

1. Current account
1. Car & Home ins 1. Investments
2. Health insurance
2. Credit card 2. Car & Home ins
3. Car & home ins
3. Current account 3. Current accont


Internet is the preferred source of information
when researching financial products – by far
What are your sources of information before subscribing a financial product?
The Net is 80%
preferred check their
by 89% bank’s site
first!


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


Online finance users are increasingly self-directed
Before subscribing a financial product or service,
How do you make up your decision?

Prefer
Prefer
to make
to make
decision
decision
alone
alone
65%
57%


And increasingly committed to the online channel

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%


The self-directed largely dominate
among online finance users
2%
1% 1%

37%
38%
50%
49%
60% 62%

Self-directed
Validator
Delegator
2%
1%
17%
26%
35%

64%
72%
83%


A majority of committed Net users
want to do a maximum online
4%
5%
6%
8%
11%
11%
31%

54%
52%
34%
32%
Maximalist
Mostly researcher
52%

Not ready
3%
Not interested
7%
13%
5%
7%
4%
23%

24%
58%
25%
62%
69%


Self-directed and committed online users
are ready to by-pass branches
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

20% of
all UK
consumers

5% of
French
consumers


Online finance users expect fewer
& more efficient in-person interactions
Would you say that the internet is transforming your relation with your bank and
that it allows you to...


Satisfaction with online finance is increasing –
but there is room for improvement
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?
0 1 2 3 4 5 6 7 8 9

2007
Decision support tools 6.53
2006
Ability to call or be called by an adviser 6.61
Product attractiveness 6.68
Wealth of information 6.98
Application facilities 7.08
Ease of use and navigation 7.32

Home page 7.47
Main security
Availability 7.96
concern is, for
Reliability
31%, online 8.09
fraud Security 8.21

Overall satisfaction 7.73


Online finance users are also satisfied
with their adviser
11%
15%
17%

83% 85% 89%

Satisfied
Not
13% 12% satisfied
16%

84% 87% 88%


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

France Italy Spain
7%
9% 22%
9% 18% 11% 27%
14%
4%
22%
3%
3%
8%
28%
6% 28%
4% 24%
24%
16%
13%

Netherlands
UK Sweden
4%
4% 7%
3%
3% 12% 24% 23%
11%
11% 18%
3%
6%
3%
4%
11%
6%
15%
32%
•45%
55%


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

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


The high expectations of online users affect the
entire multichannel experience

Online finance users are more bullish about the Net than
bankers and insurers
Online 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 price
This 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


Experts recommend multichannel tools

Remote access to product expert
•
• Instant messaging with account manager
Most effective • Free and instant call back
• Personalized email or newsletter
• Personalized alerts

• Video product presentation
Effective
• Site personalization

• Online promotions
Least effective
• Auctions


Dr Therese Torris
Programme Director
Efma
16 rue d’Aguesseau - 75008 Paris - France
Tel: +33 1 47 42 69 76
ttorris@efma.com


Main Conclusions

Internet is increasingly a sales Users trust their online bank’s
channel security
Car & home insurance most But fear of fraud is a concern
popular products online Online finance users have fewer,
Online finance users are more but more meaningful interactions
and more self-directed with their account manager
89% of online finance users see 76% of online banking users
the Net as their main source of claim to see their account
information for financial products manager less often
– against 77% a year ago Price focus
55% of online finance users 58% of Internet users browse the
claim to be self-directed – against Web for better deals – against
39% a year ago 32% only one year ago

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