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SUMMARY
Finaccord's report titled Aggregation Metrics: Consumer Attitudes towards
Online Aggregation and Broking of Financial Services in the UK offers detailed
and unique insights into the behaviour of UK consumers in the context of
financial services distribution with a particular focus on the prospects for
online aggregation and broking. Based on a primary survey of over 1,000
consumers in the UK carried out between July and August 2008, the research
provides robust and valuable data describing the way in which consumers' use
of distribution interfaces and channels is changing when they acquire
financial services. In addition to investigating the extent to which consumers
in the UK acquire banking or insurance products via the Internet at all, the
research also analyses the degree to which they compare product prices and
characteristics prior to buying and the number of websites they typically
visit for this purpose. Moreover, for each of mortgages, personal loans, motor
insurance and household insurance, it provides annual churn data and detailed
distribution interface and channel analyses to illustrate the future potential
of both on-line aggregation and broking, and alternative distribution systems.
Furthermore, the report measures the consumer recognition rates achieved by
leading online aggregators and brokers in the UK, and how these compare to the
online brands of major direct providers, and also considers the extent to
which consumers in the UK are aware of and / or value the fundamental concepts
of online aggregation and broking. Key features of the report include: insight
into the propensity of UK consumers to buy goods and services online,
including segmentation of customers for online financial services; analysis of
how consumers in the UK use the Internet for financial services including how
they use it for research as well as for buying online, how many websites they
visit before taking out banking or insurance products, and whether their
choice of website is influenced by its status as the online shop window of a
bank or insurance company (ie. the ultimate provider), an aggregator or a
broker; brand recognition of 20 financial websites in the UK including those
of the leading direct providers of banking and insurance products as well as
those of the most prominent aggregators and / or brokers; benchmarks for the
distribution of four key products in the UK (mortgages, personal loans, motor
insurance and household insurance), measuring the segmentation of sales by
distribution channel and by interface, and how this is changing over time;
overall summary of the apparent attractiveness of markets for online
aggregation and broking, comparing sales by brokers against sales via the
Internet and their rates of change in the UK.
TABLE OF CONTENTS
0.0 EXECUTIVE SUMMARY
- UK consumers are willing to research or acquire financial services online,
especially insurance with high levels of usage across demographic segments
- Nearly a quarter of consumers use seven or more websites when researching
insurance online
- The Internet is now the main distribution interface for personal loans,
motor and home insurance taking sales away from direct insurers and banks
- Switchers out-number new customers for mortgages, motor and household
insurance
- Aggregators' and brokers' websites are as well-recognised as direct
providers although many consumers appreciate that aggregators and brokers
offer something different
1.0 INTRODUCTION
- Finaccord
- European consumer research
- Aggregation
- European market, partnership and bancassurance research
- Research rationale
- Online aggregation is having a major impact on financial services
distribution
- Interest in online aggregation is not limited to traditional providers of
consumer financial services
- The growth and influence of Confused.com and Moneysupermarket.com are
beyond dispute although the UK now endures a surplus of competitors in online
aggregation and broking
- Heavy spending on advertising has helped the industry leaders to stay
ahead of the pack
- The Aggregation Metrics research has been structured to test the appetite
of consumers in Europe
2.0 SURVEY ANALYSIS
- Introduction
- Consumer propensity to purchase via the Internet
- More than three quarters of consumers in the UK have bought books or music
online and a majority have bought insurance via the Internet
- Wide potential for online marketing and partnership programmes, especially
in travel and utilities
- Propensity to research and take out financial products over the Internet
- Banking products
- Most consumers use the Internet in one way or another when buying banking
products
- Longevity of Internet usage and household income affect propensity to buy
banking products online
- Insurance products
- Two thirds of UK consumers use the Internet to research and / or buy
insurance
- The demographic trends for online insurance are similar to those for
online banking
- Comparison with European average
- Number of websites visited prior to taking out financial products online
- Banking products
- Online customers are most likely to solicit details for banking products
on three occasions Insurance products while nearly a quarter of consumers
search seven or more sites for insurance
- Mortgages
- Switching rates and brand new loans
- Analysis of distribution interfaces used
- Telephone sales outstrip the Internet for mortgage distribution
- Analysis of distribution channels used
- Mortgage aggregators and brokers overtook direct lenders as a distribution
channel during 2007
- Personal loans
- Switching rates and brand new loans
- Analysis of distribution interfaces used
- Use of the Internet is growing at the expense of face-to-face and
telephone transactions
- Analysis of distribution channels used but this has had little impact on
the patterns for the actual distribution channels
- Comparison of distribution channels used by offline and online customers
- Loan aggregator / brokers and supermarkets both gain from the trend in
favour of online distribution
- Motor insurance
- Switching rates and brand new sales
- Analysis of distribution interfaces used
- The Internet is now the dominant distribution interface for motor
insurance in the UK Analysis of distribution channels used and has helped
insurance aggregators and brokers to gain market share rapidly
- Comparison of distribution channels used by offline and online customers
- Insurance aggregators and brokers are dominant among online customers
- Household insurance
- Switching rates and brand new sales
- Analysis of distribution interfaces used
- Internet sales have risen at the expense of both the telephone and postal
interfaces
- Analysis of distribution channels used although this shift has affected
distribution channels less than observed for motor insurance
- Comparison of distribution channels used by offline and online customers
- Banks fail to compete in the online market for household insurance but are
strong offline
- Summary of market attractiveness for online aggregators and brokers
- Motor insurance is unquestionably the star product for online aggregation
and broking in the UK
- Switching increases the market available for aggregators and brokers
- Switchers outnumber new customers for all products except personal loans
- Online aggregators and brokers of financial services
- Recognition rates
- More than 90% of consumers know the leading brands of aggregators and
direct providers
- Consumer understanding of aggregation and broking concepts
- Brokers of financial services
- UK consumers display a high level of understanding of the role of brokers
of financial services
- Aggregators of financial services but have a hazier idea of the exact
definition and role of aggregators
3.0 APPENDIX
- Research sample
- The research embraces a total of 1,005 respondents in the UK
- Research questionnaire
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