Disruptors Poised For Success in Retirement Space

Nearly one-third of investors globally say they would switch to Google, Amazon or Facebook for banking, insurance and financial advisory services. 

A new survey by Accenture looking at the investment preferences among global consumers shows seven in 10 people would welcome more robo-advisory services in the areas of banking, insurance and investment advice.

For purposes of the survey robo-advice was defined as “computer-generated advice and services that are independent of a human adviser.”

Important to note, however, is that a large number of consumers still want human interaction for their more complex needs—in deciding how to optimally combine banking, insurance and advice, for instance. It’s a situation that has left firms feeling challenged, facing the task of blending a physical presence with an advanced digital user-experience.

At a high level, consumers globally expect strategies that “seamlessly integrate technology, branch networks and staff to provide service that combines physical and digital capabilities and gives consumers a choice.”

Specific findings show 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%) consumers said they would welcome robo-advice for traditional investing, where the technology first emerged.

The Accenture study shows 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,” notes Piercarlo Gera, senior managing director, Accenture Financial Services. “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.”

NEXT: Pursuing ‘first-class’ human interaction 

Consumers indicated the main attractions for using robo-advice platforms is the prospect of faster (39%) and less expensive (31%) services, and because they “think computers/artificial intelligence are more impartial and analytical than humans (26%).”

According to Accenture, consumers are willing to switch to non-traditional providers for financial services. In fact, nearly one-third indicated they 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.

“Tech giants are not the only ones putting pressure on financial service firms,” the survey report concludes “Nearly the same percentage of global consumers would also consider switching to a supermarket or retailer for their banking (31%) and insurance (30%) services.”

The survey shows nearly two-thirds of consumers are interested in personalized insurance and banking advice based on their individual circumstances, and when asked about wealth management advice, that increases to 73%. Nearly half of consumers want providers to play a supporting role in the purchasing process for non-investment products, such as a house or new car or services related to those purchases.

“The survey also found that consumers are willing to share their data with financial services providers in exchange for benefits like less expensive and faster services,” Accenture points out. “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.”

The full report can be downloaded at www.accenture.com/FSConsumerStudy