15.3 C
New York

The UK’s digital financial services sets it apart in Europe – cementing consumer trust is now key (Sara Costantini)

Date:

The UK is a global financial services hub and home to some of the world’s most advanced and innovative fintech companies. The country stands out as Europe’s most attractive location for international investment, securing more than $9 billion of investment
in the first half of 2022, significantly ahead of Germany, Europe’s second biggest fintech destination, with $2.4 billion. 

Given the high levels of investment and innovation we have seen in recent years, the maturity of the sector’s ecosystem is extremely advanced. And UK-based fintechs are known to offer the best of breed financial products and services, whether solely or through
partnerships with bigger financial institutions.  

This is having a very tangible impact on people’s attitudes regarding how they engage with financial services in the UK. To understand this, as well as attitudes across Europe, CRIF commissioned research asking thousands of people across the continent for
their preference in this area. And the findings speak for themselves.  

People in the UK are nearly twice as likely as their European counterparts to prefer online application processes for financial products and services, via a website, app, online chat or video call function (59% vs 33%). By contrast, preference in the other
countries surveyed – France, Germany, Italy, Slovakia and the Czech Republic – remains staunchly in favour of in-person meetings and going into a local bank branch.  

This success should be celebrated and underlines not just the UK’s place as a hub of innovation, but also consumers’ embrace of new, digital-first approaches to financial services which give them greater control, insight and security over their money.   

Yet despite the obvious success of the sector in the UK, our research also identified some major issues preventing financial services from realising the full benefits of this digital adoption. One of these problems is that many consumers in the UK still
tend to view financial service providers with scepticism. 

Specifically, our research finds that many consumers are concerned that financial providers don’t have their best interests at heart. In fact, nearly one in five (18%) consumers worry that, should they turn to their provider for support, they would be sold
products or services that aren’t right for them. 

Knowing your customer is of course vital to offering them the right products and services, but when the issue of data, privacy, and fraud come into play, this level of distrust only increases. Our research shows that over two-thirds of UK consumers (67%)
believe sharing their financial data would leave them more open to fraud. When compared to the rest of Europe, where on average 55% express concern, it becomes clear that issues around trust are holding back financial services in the UK, especially when it
comes to further digital adoption. 

Despite these issues, however, our research on the UK identifies clear areas that the industry should take encouragement from and focus on. For example, UK consumers say they would be more open to sharing their data with financial services providers if they
knew it would benefit them in the long run, and if they knew their details were secure. Meanwhile, nearly 4 in 10 (37%) would be willing to share more information if it improved their ability to borrow – this is particularly relevant during the cost-of-living
crisis where more and more individuals are looking to financial services to help alleviate financial pressures. And somewhat unsurprisingly in the UK, younger people are the most open to this with over half (53%) of 18-34s stating that they would be willing
to share their data in return for these benefits. 

It’s clear that, once presented with the benefits that sharing more of their financial information can create, more people in the UK are willing to do so. Across the ecosystem there now needs to be greater recognition of this sentiment and more effort made
towards addressing the trust issue that has clearly developed amongst consumers, so more can benefit from things like more accurate credit scoring, lower risk lending, and products and services tailored to consumers’ specific circumstances and needs.  

The latter – more personalised financial products and services – particularly during the cost-of-living crisis is more vital than ever for consumers. As such, financial services institutions and providers of all sizes need to do more to educate their customers
about the benefits of online and other digital forms of banking. Innovations like open banking, for example, are safe, have high security standards and enable a range of consumer benefits. And technologies such as this can drive financial wellbeing by assessing
individuals’ financial situations and improving their ability to borrow.  

Once trust is cemented, financial institutions can, during this crisis, step up to the plate and continue to offer customers the best of breed solutions with confidence. Only then will financial services in the UK be able to ensure all consumers and businesses
can fully reap the benefits of the digital revolution and face any economic uncertainty with greater confidence.  

  • Coinsmart. Europe’s Best Bitcoin and Crypto Exchange.Click Here
  • Platoblockchain. Web3 Metaverse Intelligence. Knowledge Amplified. Access Here.
  • Source: https://www.finextra.com/blogposting/22913/the-uks-digital-financial-services-sets-it-apart-in-europe---cementing-consumer-trust-is-now-key?utm_medium=rssfinextra&utm_source=finextrablogs
spot_img

Latest Intelligence

spot_img

Latest Intelligence

spot_img