Customer experience and payment behaviours in the PSD2 context

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Customer experience and payment behaviours in the PSD2 context PwC 2. Online shopping is the engine Find the gap in the digital The generation. for digital payments banking experience of multi bankers. 48 57 94 60, of consumers shops of consumers prefers to of customers trusts its of customers confirms that. online between 2 and 5 shop using more traditional bank to protect its data and it has current accounts in. times per month devices such as a PC is confident in using the more than one bank. bank s online services,20 36 24 50, of consumers shops of consumers chooses of customers is now using of customers would not pay. online more than credit cards as the preferred financial apps offered by for the aggregation service. 5 times per month payment method for third party providers. shopping online,of consumers prefers of consumers prefers. of customers prefers using of customers is willing. to shop online to obtain alternative payment for non banking financial apps to pay for the. lower prices shopping online as they provide a better aggregation service. user friendly experience, Customer experience and payment behaviours in the PSD2 context PwC 3. Executive Summary, The growth of digitalisation and the rise of new user.
experience models are changing the expectations and. needs of consumers forcing the banking and payments. sector to increase their customer centric approach. The digital revolution and the change in consumer,behaviours are the triggers for the increase. and spread of financial apps The willingness to,adopt mobile apps with user friendly interfaces. facilitates the use of mobile payments for consumers. independently whether the app is provided by a bank. or by another player The propensity of customers,to use alternative financial apps may introduce. more risks for banks that on the other hand can be. disintermediated,These interviews undertaken by PwC and Strategy. confirm the trend of the use of technology in every day. life and aim at analysing consumers online shopping. habits and their willingness to use innovative payment. methods We see that consumer habits are changing, as well as the relationship they maintain with their.
bank this is confirmed by the increased focus on online. shopping especially by Millennials The outcomes of. this analysis can be used as a starting point for banks. when deciding their approach to the digital banking. transformation rethinking their current market position. Customer experience and payment behaviours in the PSD2 context PwC 4. Methodology and participation,PwC and Strategy have analysed consumers. perception on digital payments The sample is composed. by 1 700 responses from European consumers in the,period commencing from October to December 2017. Most of respondents are male 56 between the ages,of 26 and 35 55 they hold a master s degree 67. and earn an average net income that ranges between. 3 000 and 4 000 31, The results are presented in 4 European geographical. areas i e 14 Northern Europe 17 Western Europe,22 Southern Europe and 47 Eastern Europe in.
order to better identify trends and compare the level of. digitalisation for each of these areas, Customer experience and payment behaviours in the PSD2 context PwC 5. Online shopping is the engine for digital payments. Digitalisation is strongly influencing and modifying 1 How often do you shop online in a month. shopping behaviours and if implemented correctly answers grouped by ages. can be a powerful and effective way for banks to,maintain their client base while they continue. engaging with new customers Banks are in a, favourable position when it comes to participating Over 66 17 17. in the life of their customers not only through the 66. development of the banking apps but also through, the creation of a marketplace able to offer different 56 65 43 44 13. functionalities to monitor customers spending habits. understand customers needs and guarantee customised. and targeted solutions 46 55 30 45 25, More than half of respondents shop online with a high.
monthly frequency 48 between 2 and 5 times per 36 45 22 47 31. month around 20 shops more than 5 times per month,Most of the online shoppers are between 26 and 55. years old see Figure 1 26 35 31 49 20, Surprisingly even the population between 56 and 65. years have embraced the concept of online shopping 16 25 45 44 11. in particular in Northern Europe In fact 25 of, respondents shops online more than 5 times per month. as opposed to 14 in Southern Europe This trend, continues when looking at Eastern Europe 100 Never or rarely max once a month. Sometimes 2 5 times a month,and Western Europe 50 even though with a lower.
Often more than 5 times a month,frequency of 2 to 5 times per month. Those consumers who prefer physical shopping to, online shopping declare that the main reason for this is 2 Which aspects are more important for you when shopping online. that they are either concerned about the safety of online. payments 21 or because they continue to prefer the. more traditional payment methods and the personal,contact with the in store salespersons 53. The rise of online shopping is undeniably facilitated. by the fact that it has become more accessible 24 Speed and easy usability. through the use of PCs and smartphones but also,20 Variety of products. to the increase in guaranteed security when making. online payments Consumers prefer to shop online to 11 Flexibility. obtain lower prices and because of the easier and quicker. usability compared to shopping in store In addition the 10 Guaranteed security. variety of products available online is considered for 20. of consumers as an important aspect why they prefer 4 Additional value incentives. online shopping see Figure 2,48 of consumers shops online.
between 2 and 5 times per month,20 of consumers shops online. more than 5 times per month,28 of consumers prefers to shop. online to obtain lower prices, There is evidence that the usage of mobile devices. smartphone and tablet has increased when purchasing 3 Which device do you most frequently use for shopping online. online compared to last year1 even though the majority. of consumers prefer to shop using more traditional. devices such as a PC, Mobile payments are starting to become popular and. this can be noticed by the fact that smartphones as. represented in Figure 3 represent the second most used 31 Smart. device to initiate a payment during the last 12 months ne. This result is also confirmed by the answers obtained for. each European area 12 Tabl, The majority of people still prefer the use of a laptop in.
particular in Northern Europe where 47 of consumers. uses a laptop for shopping online However 39 uses, a smartphone almost reaching the percentage of those. using a PC in other areas of Europe this gap is more. Mobile devices are providing new channels that,banks can use to strengthen the relationship with. their customers,1 Source Total retail 2017 PwC 2017. 57 of consumers prefers to,shop using more traditional. devices such as a PC,It has emerged that 36 of online shoppers chooses.
credit cards as the preferred payment method This is 4 Which is your preferred payment method when shopping online. confirmed when analysing the answers obtained for, the different geographical areas and the use of devices. smartphone PC laptop tablet It emerges that only in. Eastern Europe international debit cards are the most. used method of payment Moreover 8 of respondents, prefers alternative payment for shopping online such as. Sofort iDeal We can draw a conclusion that although. traditional payments are still widespread the, market is increasingly receptive to new innovative. payment services see Figure 4,36 Credit card,23 Debit card. 8 Alternative payment,7 Mobile app,5 Prepaid card,36 of consumers.
chooses credit cards as the,preferred payment method. for shopping online,8 of consumers prefers,alternative payment for. shopping online,Indeed Figure 5 shows that when considering new. innovative payment methods Eastern Europeans 5 Which is your preferred payment method. using Laptop PC for shoping online, are those most receptive to using alternatives when. compared to other European areas, The general trend however is that we see is that Alternative.
consumers on a whole are ready to consider using payment 4 2 4 14. new payment methods which will compete with those method. offered through traditional channels Banks should,start to think about new and innovative ways. for connecting with their customers proposing,themselves also as payment providers. Paypal 21 21 19 23, Northern Europe Southern Europe Western Europe Eastern Europe. Customer experience and payment behaviours in the PSD2 context PwC 10. Find the gap in the digital banking experience, Markets are about to change radically On the one hand 6 To what extent do you trust your bank to protect your data. consumers are continuously changing their habits and and provide secure operations online. preferences on the other hand banks will have to,compete with new market players in other sectors.
Mostly trust 56, Consumers already use several services in the banking Somewhat trust 19. sector offered by third party providers and banks need. to react in order to compete and keep pace with these Completely trust 19. new entrants,Mostly do not trust 4, In the perception of consumers the banking sector is. Not at all 2, synonymous to the highest levels of IT security 94. of customers trusts its bank to protect its data and is. confident in using the bank s online services of which. 19 says completely trust see Figure 6 Most of the, customers consider the security and confidentiality of. data an extremely significant driver when choosing. their bank Instead it would seem that they are adverse. to transfer their data to a non financial third party. 94 of customers trusts its,bank to protect its data and is.
confident in using the bank s,online services,Banks should take advantage of this position by. investing in innovation and concurrently increasing 7 Do you use any financial apps which are not provided by your bank. their digital offering,8 Northern, Analysing the diffusion of non banking apps and how 9. Europe 12 16 11 61, consumers perceive them it is important to note that 7. the market is evolving and that other players operating 76 Europe 8 11 6 75. in the payments sector are starting to gain a position of. trust even if at the moment most consumers are not yet Southern. Europe 10 9 6 75,ready for them, Just around 24 is now using financial apps offered by Europe 5 6 7 82. third party providers see Figure 7 These results are Yes frequently Yes sometimes Yes but rarely No. similar for the different European areas Instead there. is a clear preference amongst respondents to use the. 8 Do you use any financial apps which are provided by your bank. financial apps provided by their bank see Figure 8. This shows that banks still have a preferred direct line. with their customers, However despite the marginal use of these alternative.
financial apps it is important to understand the apps 92 Yes. differentiating factors and the advantages over those. provided by the banks,24 of customers is now using financial. apps offered by third party providers,40 of customers prefers using non. banking financial apps as they provide,a better user friendly experience. 40 of respondents prefers using non banking, financial apps as they provide a better user friendly 9 What do you perceive are the major benefits using. alternative financial apps,experience Design attractiveness is considered an.
important aspect for many users in Europe except for Allows an integrated overview 24. those in Western Europe who prefer extra features and additional functionalities 18. In Southern Europe the costs associated with the service 12. Higher security 9, significantly influence the choice of alternative apps. see Figure 9 This means that banks should invest Lower costs 14. primarily in optimising both the usefulness and the. design of the apps considering additional investments Attractive app design 19. in areas that their customers perceive as valuable 44. Easy to use,e g less manual input, Banking and non banking apps are currently used for. Northern Europe Southern Europe Western Europe Eastern Europe. different purposes Figure 10a 10b As a proof of their. intrinsic nature banking apps are used mainly to display. 10a Activities conducted through 10b Activities conducted through. the list of transactions and to initiate payments while banking financial apps alternative financial apps. non banking apps are primarily used for online shopping. and to search for general information Indeed only 17. of respondents uses non banking apps for displaying View transactions 32 Online purchases 32. account balances and checking transactions,Bank transfers General information. Results are heavily influenced by those respondents search. between the ages of 26 and 35 46 as they use, alternative apps for online purchases and banking Online purchases 20 View transactions 17. apps for different purposes such as displaying,transactions and initiating payments .
Speed and easy usability Variety of products Flexibility Guaranteed security Additional value incentives Other 2 24 20 11 10 4 3 28 of consumers prefers to shop online to obtain lower prices 20 of consumers shops online more than 5 times per month 48 of consumers shops online between 2 and 5 times per month PwC 7 There is evidence that the usage of mobile devices smartphone and

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