Published Wednesday 22nd January 2020
The financial sector is a hugely important part of consumer’s lives and the economy as a whole. For it to succeed, trust in the service is perhaps the most important trait. Over the last few years, that subconscious trust we put into vital financial services has been called into question on multiple occasions. From the IT disaster at TSB in 2018 to the recent hack of currency exchangers Travelex, these headline-grabbing incidents cause everyone to evaluate how reliable finance providers are in the modern world.
For many, these incidents and others like them are an unfortunate event that may cause us to change provider, but little more. However, there is a generation of consumers coming through who are evaluating their priorities based on these moments. Research suggests that future consumer’s expectations, particularly regarding security, will far surpass current levels. If companies want to continue being successful in the finance industry, many will have to improve their performance in order to regain any lost trust.
A New Generation of Financial Consumers
A recent report looked into attitudes towards online banking security between members of Generation Z, which roughly equates to those born in 1995 or later. According to the survey, 95% of all respondents believe that banks should be doing more to protect from fraud.
For some consumers, things like online banking can feel like a new perk, something that is useful but doesn’t make up the core of a financial business’ offering. However, for younger consumers, digital services are increasingly important. For those that have grown up surrounded by technology, there is an acute awareness as to its potential perils.
According to the survey, around three-quarters of respondents believed it was their personal responsibility to look after their data. These figures could be a sign of the lack of trust this generation is developing for traditional financial service providers, mainly when they operate in the digital space. This decision making could also be fuelling the successful growth of startups in the online banking sector, such as Moz and Starling Bank.
Focusing Priorities for Finance Providers
Various studies have been conducted into the potential consumer habits of Generation Z, who could become the bulk of consumers by the end of this decade. A running theme throughout all studies appears to be this generation’s ability to traverse the digital landscape, decipher truth from fiction and make decisions based on the alignment of their beliefs with those of companies. It’s perhaps no surprise that Generation Z is making a significant impact when it comes to vegan and climate change movements, for example.
While the survey mentioned above focuses on the banking sector, it would not be a surprise to see these beliefs mirrored across the whole finance industry. As businesses begin to look towards the future, they must recognise the changing consumer habits young consumers could introduce.
As digital natives, Generation Z is finely tuned to the potential perils of online activity. These future consumers widely expect all modern businesses to share these expectations, putting advanced security at the forefront. For many companies, this will involve serious investment over the next few years, as this generation’s impact gets even stronger.
While necessary for long-term success in an increasingly competitive and digital finance industry, some providers may struggle to find the investment capital required for such an upgrade. Here at Expense Reduction Analysts, we’ve been working with the financial sector for many years, helping to unlock much-needed money through long-term corporate cost savings.
At ERA, our specialist procurement experts can work to save you money in a range of areas, including printing, personnel and records management. Our detailed, long-term approach helps to develop a cost management culture through the business, ensuring continued procurement savings. This approach helps to unlock more capital for the company, which can prove invaluable at a time when investment is increasingly important.
If you’re interested in discovering what our team could do for you, why not get in contact with us today?