January 11, 2017 by Canadian Underwriter
Seven in 10 consumers around the world would welcome robo-advisory services – computer-generated advice and services that are independent of a human advisor – for their insurance, banking and retirement planning, according to a new report by Accenture.
The 2017 Global Distribution & Marketing Consumer Study, released by the global professional services company on Wednesday, found that overall 57% of those polled would share more data with insurers in return for new benefits. The percentage was slightly lower (55%) in Canada and higher (66%) in the United States.
For the survey, Accenture surveyed 32,715 respondents across 18 countries and regions, including Canada, the U.S., Benelux (Belgium, the Netherlands and Luxembourg), France, Germany, Ireland, Italy, Nordic countries, Spain, the United Kingdom, Brazil, Chile, Australia, Hong Kong, Indonesia, Japan, Singapore and Thailand. Respondents were consumers of banking, insurance and wealth management services; they were required to have a bank account and an insurance policy and were asked if they used an independent financial advisor, wealth manager or asset manager, with total financial advisory responses totalling 9,987.
Despite the findings that seven in 10 global consumers would welcome robo-advisory services for their insurance, banking and retirement planning needs, “a large number of consumers still want human interaction for their more complex needs, leaving firms challenged with blending a physical presence with an advanced digital user-experience, as they look to integrate robot and human services,” Accenture explained in a press release.
The survey also found that consumers are now open to robo-advice to help determine which bank account to open (71%), which insurance coverage to purchase (74%) and how to plan for retirement (68%). Nearly four out of five (78% of) consumers said they would welcome robo-advice for traditional investing, where the technology first emerged.
However, the study also found that nearly two-thirds of consumers still want human interaction in financial services, especially to deal with complaints (68%) and advice about complex products such as mortgages (61%).
“We found strong consumer demand exists today for robo-advice in all areas of financial services – banking, insurance and financial advice,” said Piercarlo Gera, senior managing director of Accenture Financial Services, in the release. “While financial institutions may expect to benefit from internal cost reduction by providing customers with a ‘robo’ option, our research found that consumers also expect first-class human interaction. Successful financial services firms will therefore need a “phygital” strategy that seamlessly integrates technology, branch networks and staff to provide a service that combines physical and digital capabilities and gives consumers a choice.”
Consumers indicated that the main attractions for using robo-advice platforms is the prospect of faster (39%) and less expensive services (31%), and because they think computers/artificial intelligence are more impartial and analytical than humans (26%).
In addition, the countries with the biggest appetite for robo-advice are in the emerging economies of Indonesia (92%), Thailand (90%), Brazil (86%) and Chile (84%) – all markets where it is already common to use a smartphone or other digital device as the primary vehicle for financial services interactions. Even in the countries with the lowest demand – Canada (56%), Germany (59%) and Australia (61%) – more than half of consumers surveyed said they are willing to use robo-advice.
Another finding was the consumers are willing to switch to non-traditional providers for financial services. Nearly one-third would switch to Google, Amazon or Facebook for banking services (31%), insurance services (29%) and financial advisory services (38%). For consumers aged 18 to 21 years old, the number willing to switch banking services to one of these companies only rises to 41%, “indicating that many younger consumers see value in traditional financial institutions,” the release said.
And tech giants are not the only ones putting pressure on financial service firms; nearly the same percentage of global consumers would also consider switching to a supermarket or retailer for their banking (31%) and insurance (30%) services.
“Consumers expect nearly all of their transactions to be on par with the service they receive from GAFA (Google, Amazon, Facebook and Apple) companies, which poses a challenge for banks in particular,” said Alan McIntyre, senior managing director, head of Accenture Banking, in the release. “Banks need to create branches that provide an advanced digital experience combined with convenient locations, while also developing an online digital experience that can compete head on with the tech giants. The vast majority of today’s consumers view their bank relationships as entirely transactional; in order to gain customer loyalty, banks have to be more assertive in using technology to provide tailored, personalized offerings when, where and how customers want them.”
Regarding personalization, the survey found that nearly two-thirds of consumers are interested in personalized insurance (64%) and banking (63%) advice based on their individual circumstances, and when asked about wealth management advice, that increases to 73%. Nearly half of consumers (48%) want banks to play a supporting role in the purchasing process for non-banking products, such as a house or new car or services related to those purchases (such as insurance products, assistance with the sale and/or closing process), the release said. Consumers indicated that banks could assist with these important decisions by sending helpful information based on consumer location data, price range and other personal preferences.
Consumers are also willing to share their data with financial services providers in exchange for benefits like less expensive and faster services. Globally, 67% would grant their bank access to more personal data, but 63% want more tailored advice and demand a priority service – such as expedited loan approvals – or a monetary benefit, such as more competitive pricing, in return for the information they share. More than half (57%) of consumers would grant their insurance provider access to personal data, but 64% want more tailored advice in exchange.
For more information on the study, visit https://www.accenture.com/us-en/insight-financial-services-distribution-marketing-consumer-study.