After surveying over 47,000 consumers across the globe, our recently released 2020 Banking Consumer Study surfaces important consumer trends, behaviours and beliefs. As the lead for Strategy and Consulting in Europe, I wanted to narrow the scope of our research to talk specifically about the region. In this post I focus on the theme of trust, with a high-level analysis that compares the responses from Europeans with those from other parts of the world.
Europeans find data sharing too intrusive
Respondents in Europe showed more hesitation to share data than their counterparts elsewhere in the world, even when it would result in better service. Only 48 percent said they would share more personal data with a bank for certain benefits or a more personalised service, compared with 56 percent for other respondents.
The reasons Europeans are reluctant to give up personal data is interesting. We seem less concerned about data getting stolen from a provider (18 percent, compared to 32 percent for others) or that our data will be sold to third parties (20 percent, versus 26 percent for others). Our reluctance is mainly due a perception that it’s simply too intrusive: 48 percent of Europeans cited this as a reason to withhold data, compared with only 35 percent of other respondents. This implies that data privacy in Europe is more a matter of personal conviction, or even annoyance (the second-most cited reason is “I worry that I’ll be sent lots of irrelevant information”), than a practical concern.
So, is there a difference in the type of data Europeans are willing to share? To some degree.. Europeans are almost willing as other respondents to share location and income data in order to get more efficient, well-informed advice and services. But we are significantly less likely to share lifestyle, health and relationship status data for these kinds of perks (variance ranges from 8.2 to 14.4 points).
This pattern follows when we consider willingness to share data for specific services, such as more relevant advice and discounts. Overall, Europeans are just slightly less willing (2 – 5 percent less) to share data, regardless of the type of service being offered and even if that includes lower prices and discounts.
Level of trust in advisors lowers with digital channels
A theme of our 2020 Banking Consumer Study is a lack of trust in banks. Europeans are no different. What is particularly noteworthy, however, is how much the channel seems to impact the trustworthiness of a service.
When looking for advice in applying for a loan or mortgage, 56 percent of Europeans said we would trust a human advisor in a branch “a lot.” A human advisor over the phone, however, drops down to 35 percent. A human advisor over a video call? Only 26 percent. In every scenario, consumers are still engaging with a human advisor. Yet, providing the advice by video instead of in-branch reduces trust by more than half.
This is particularly striking because this survey was conducted during the COVID-19 pandemic, when we were all forced to interact via video calls. It’s possible that consumers are more sensitive about video calls for advice than for other purposes. Whatever the reason, this survey response implies a kind of intangible connection that seems to occur in a face-to-face meeting but less so over the phone or on video. The question for banks moving forward is: How can this in-person trust be transferred to a digital channel? But that’s for another blog post…
By the way, this same pattern holds true for advice about product offerings. One in two Europeans would trust the in-branch advice “a lot”, but this collapses to 25 percent delivered on a video call.
Consumers were also asked how much trust they had in different types of service provider – to look after their long-term financial well-being and to safeguard their data. For both questions, European respondents showed high levels of trust in their bank – significantly higher than in other organizations such as tech providers, retailers and social media.
Complacency is a barrier for Neobanks
Before I wrap-up, I want to quickly touch upon neobanks. Europeans regard neobanks skeptically, whether that’s about trusting them to look after their data (6 percent said they had “a lot” of trust), to look after their long-term financial wellbeing (4 percent) or to provide products and services outside their core areas of expertise (8 percent). But each of these questions also had 40 – 50 percent of respondents saying “I’m not sure.”
As it turns out, this lack of trust has little to do with the neobanks themselves. Almost 50 percent of respondents said that one reason they don’t have a neobank account is that they are happy with their current provider. To go along with this, 38 percent said they were unfamiliar with what neobanks had to offer. The barriers to entry for neobanks seem to be complacency and a lack of product knowledge, rather than dissatisfaction with what neobanks are offering.
The global Banking Consumer Study report also examines how consumers’ behaviour and preferences have shifted due to the pandemic – you can access it here.