Convenience, time-saving and ease of use are the three big drivers of consumer engagement with online banking according to a new study by Mastercard in Europe.
Six out of ten Europeans welcome digital solutions and believe that the digitisation of the banking industry is making their lives easier and safer.
According to Javier Perez, President, Mastercard Europe, “As a technology business operating in the payments industry we have long been focused on driving innovation at speed and scale. It is important that we don’t innovate for the sake of it but instead understand what our partners and their customers need to continue to make use of digital payments across all new devices.”
He said the study reveals that consumers want easy and secure banking solutions and are very open to digital products if they improve the experience.
“We are embracing this change and are proud to also be the partner of choice to Europe’s breed of new banks with our innovative, safe and secure solutions while continuing to ensure established institutions continue to build best in class tools in the increasingly digital landscape.”
Innovation drives new customers
The study also demonstrates that customer loyalty towards their current bank is comparatively low. Nearly half of the consumers in Europe (49 per cent) say they will consider switching to a digital bank at some point.
Especially, in Germany consumers have little loyalty: 27 per cent think of leaving their bank within the next 12 months. That is by far the highest rate in Europe whereas the Dutch are the most loyal. Only 7 per cent state that they consider changing their bank and 52 per cent want to stay.
Furthermore, European consumers believe that the process of digitisation in the financial industry will affect bank branches. Two thirds think that bank branches will still exist in ten years but decrease in numbers whereas only 6 per cent are convinced that bank branches will have ceased to exist in ten years’ time.
Other findings of the study are:
- When asked what consumers would change within their current bank, if they could, their primary demand was “convenience”, wishing that their banks’ products were “available everywhere as well as easy to use” (42 per cent).
- The second most common answer was flexibility and 24/7 consultation service (27 per cent).
- More than 85 per cent pursue banking digitally (online or mobile) at least once a month, and 38 per cent even do it on a daily to weekly basis.
- The most active users are the British (54 per cent), followed by the Dutch (51 per cent) and the Swedes (47 per cent), doing digital banking at a daily to weekly basis in contrast to only 26 per cent of the Swiss and 27 per cent of the Hungarians at the bottom of the surveyed markets.
The process of digitisation in the financial sector relies on partnerships, a result which is also endorsed by European consumers in the Digital Banking Study. More than 75 per cent of the respondents in the study said they value Mastercard as a right partner for banks.
One of Mastercard’s biggest partners in mobile banking is N26. Having started out in Germany, N26 is now in 17 markets and the leading mobile bank in Europe.
According to Valentin Stalf, co-founder and CEO of N26, the company is centered on user experience, and technology plays a vital role in achieving this goal.
“It was clearly a challenge to find partners who have the digital and therefore flexible infrastructure creating unique and simple user experiences. We recognised quite early that Mastercard is a dynamic player on the market, open for new products and technologies. Receiving these qualities from a renowned brand that keeps up with the newest developments, but also has a global network, is like hitting the jackpot.”
Mastercard provides N26 with issuing and processing solutions which are essential in order to offer the product to the customer. Beyond that, Mastercard consults N26 on technical solutions regarding payment services. As one of the pioneers in the field, N26 aims at digitising all products and services traditional banks offer.
Another example is Holvi, a company which offers digital banking to micro entrepreneurs. The Finnish company started out by solving the everyday problems of self-employed people with their finance management.
Furthermore, these micro entrepreneurs often had difficulties to receive appropriate support from traditional banks. With the goal in mind to become the preferred financial management service for micro entrepreneurs and small businesses in Europe, Holvi helps their customers saving time, money and running their business more effectively.
Since 2016, the Holvi Business Mastercard connects directly with their service and allows Holvi’s customers to stay on top of their finances in real time.
“For us it is important to work with partners who stand for trustworthiness. Our mission is to provide borderless banking to our customers in the digital era – Mastercard does not know any borders and works worldwide, just like our customers,” said Antti-Jussi Suominen, CEO at Holvi.