20 December 2016
Customer attitudes to payment service options for saving and mortgages
The way in which consumers make payments and manage their money has changed rapidly over the past five years, and the next five are set to be no different.
Consumers’ needs are changing and we are seeing our Members demand our services in new ways - asking for more accessibility, more interaction online and service that is seamless across our branches, contact centre and website. We at the Principality Building Society are working on ensuring our business will be fit for the future, particularly in helping technology and processes.
An online survey we conducted this year with Principality Building Society customers and potential customers showed that competitive rates top the list of importance when considering a mortgage and the provider.
Eighty per cent of customers consider having the payment services they want to be important when considering a savings account / mortgage and the provider.
Many customers do have the payment services they want from Principality, in particular direct debits and personal contact with knowledgeable staff.
Online banking is the most important payment method overall when it comes to managing a fixed term account mortgage (though mortgage payments are most likely to be set up as direct debits/standing orders, customers who use online banking will monitor their mortgage statements when they log in).
Around half of those surveyed were familiar with fingerprint password technology, although familiarity and use of other biometrics and wearable technology is at a fairly low level at present. Whilst fingerprint password technology is more used and also seen as more important than other biometrics, the importance of these security features in comparison to actual payment services is understandably low.
Most customers and prospects (70 per cent) make mortgage payments via direct debit, while the results showed limited appetite for online/mobile management of mortgages, with traditional methods still dominant.
In considering a mortgage provider prospects surveyed noted that product features, ability to borrow more, off-set facility, overpayment facility, and length of term, customer service, opening hours, fees and special offers were important features to consider. Almost all (97 per cent)of prospects considered a competitive interest rate as the most important feature, while 87per cent considered the type of payment services as second in the rank of importance.
A third of prospects have a mortgage with their main bank account provider, which reinforces external research which has shown people are most likely to open a mortgage/savings accounts with their main provider.
Online banking is the most important payment method for all when it comes to managing an instant access savings account due to ease of access.
Most customers use multiple channels to manage their finances and expect to be able to do so. However, the majority do their day to day banking online. Online provides customers with a chance to ‘self-manage’ which is appropriate for most everyday transactions. Mobile banking also offers increased convenience and control and many are already migrating away from online banking access to advice, guidance and expertise is still considered important also, with customers wanting the option to speak to an advisor to ask questions if an issue occurs.
Telephone banking is no longer seen as an efficient way to conduct transactions. It takes too long navigating through menus and security. However, telephone banking is an alternative way to access a ‘real person’ when problems occur but less likely to be used for transactions or researching products. The use of aggregate sites and online calculators allows customers to inform themselves before they make contact with a provider.
Online/mobile banking is now mainstream for day to day money management. Many of our respondents are already migrating from online banking to mobile banking as it is perceived to be more convenient.
The key benefit offered to customers by online/mobile banking is the freedom to ‘self-manage’ and move money easily between their different accounts. The expectation now is that money can be moved in ‘real time’ and that transfers in and out of current accounts will be instant unless terms and conditions of the product say otherwise.
Consumer behaviour and expectation is continuously evolving with technology playing a bigger part. The hybrid use of technology and human input offers the necessary advice and technology to make it easier and more efficient for customers to manage their finances. We are committed to providing financial products and services to our Members and customers that meet their needs and this involves proactively reviewing our processes and procedures to ensure that we continually improve. Our Members should be able to deal with us in the way that they want, when they need it the most. Whether that’s in branch, online or on the telephone, we want them to be able to move between the options whilst still receiving the standards of service that they have come to expect from Principality.
The above mentioned payments research was carried out in 2 stages, including 898 online questionnaire interviews (429 Principality Building Society customers and 469 non-customers) between 27th July – 10th August 2016 and 4x qualitative group discussion research including a combination of customers and non-customers in September 2016.