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From Banking to Living: FIS Annual PACE Index Showcases Consumer Insights about Banking
May 24, 2016
- FIS releases its second annual in-depth, global research study on consumer banking.
- Millennials are driving a financial revolution as the industry is moving from banking to living.
- Institutions need to strike the balance between digital and face to face.
JACKSONVILLE, Fla., May 24, 2016 – Today, FIS™ (NYSE: FIS), a global leader in financial services technology, is releasing its 2016 Performance Against Customer Expectations (PACE) Index, an in-depth, global research study on consumer expectations of financial institution performance. It surveyed more than 10,000 banked consumers in 10 countries, including Australia, Brazil, Canada, Germany, India, Philippines, Poland, Switzerland, the United Kingdom, and the United States.
Germany and the United States received the top two PACE Index scores. Brazil made strong gains; while the United Kingdom showed a three point drop from the global average compared to last year’s results.
Key Global Findings
- The ability to understand and use banking products grew in importance worldwide, reflecting growing consumer demand for user-friendly banking products and services.
- Consumers continue to expect more in terms of loyalty rewards than banks are providing.
- Expectations for aspirational support – consumers’ primary financial institution helping guide them toward their financial goals – increased in every country, providing opportunities for financial institutions to grow relationships with customers.
- More than 70% of respondents said they have no financial advisor – underscoring a prime opportunity for financial institutions to provide value to their customers.
What Millennials Said
- Being digitally connected to their financial institution matters more than reliability and transparency to millennials.
- Banked millennials are four times more likely to use a mobile personal financial management (PFM) app from their primary financial institution as from another source.
- Slow loan processing is the single biggest pain point for this consumer group.
- Seventy two percent of millennials have no form of financial advisor. Twenty eight percent are receptive to robo-advisors and another 22 percent are open to online financial coaching.
“This year’s PACE Index shows that consumers worldwide generally turn to their primary financial institutions first, but those institutions must be prepared to serve their needs immediately,” said Anthony Jabbour, chief operating officer, Banking & Payments, FIS. “That’s particularly true of millennials, who stood out in this survey for how deeply they expect their banking services to mesh with their daily lives. The survey shows that, if a financial institution wants to be a customer’s bank for life, it must first become that customer’s bank for living – meeting all the needs a customer may have in his or her daily life, so that customer thinks of the bank first, always.”
“Two-thirds of PACE respondents who own a smartphone or tablet said they have a positive relationship with at least one personal financial control tool. And those numbers are even higher among millennials and consumers in developing countries, where financial infrastructure may be lacking,” said Bob Meara, senior analyst, Celent.
A Snapshot of United States Results
- U.S. consumers still believe the foundational attributes of banking – Safety, Security, Fairness, Reliability and Transparency – are the most important. Scores of these attributes improved, if only slightly, indicating that banking providers have made modest progress aligning their performance with consumers’ expectation.
- As many as one-in-three U.S. bank customers ranked their primary financial institution as the first place they would turn for major life events that require financial investment. However, that leaves at least twice as many customers who may consider an alternative resource, particularly when it comes to investing or retirement planning.
- Last year, a significant gap existed between consumer expectations and bank performance for Recognition, rewarding consumers for their business. Unfortunately, in 2016 that gap continued to widen – by 2 points.
Insights for U.S. Community Banks
- Community bank customers continue to rank in-person service far more important than the overall U.S. ranking, and community bank delivery of in-person service outperforms their consumers’ expectations by a wide margin.
- Last year, a moderate gap existed between consumer expectations and community bank performance for Advice, providing trusted advice to help consumers manage their money. In 2016, that gap widened significantly – by 5 points. Providing financial advice, in addition to helping consumers gain control over their finances, represents a prime opportunity for community banks to make inroads, especially with millennials.
“The PACE Index provides key insights into what consumers think about banking. However, it also helps institutions map this feedback to how they run their operations, connect with their customers to grow the relationship – and ultimately – the institution,” said Jabbour. “Institutions can’t grow sustainably until they can run their operations predictably and connect consistently with customers.”
About the PACE Index
The PACE Index’s research method was comprised of 1,000 individual customer surveys in each focus country. Surveys were conducted online, with individuals aged 18-75 who have a checking or equivalent account with a financial institution, and who have financial decision-making authority within their household. Questions were designed to minimize cross-cultural biases, where feasible; for scalar questions, normalization procedures were used in the analysis to mitigate bias. Surveys also were targeted to meet age and gender demographics for each country.
The global and ten country reports, supported by country-specific infographics, can be downloaded from http://closethegaps.fisglobal.com.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, consulting, and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Fla., FIS employs more than 55,000 people worldwide and holds leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
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