Seven out of ten consumers globally are willing to use robo-advisory services for their banking, insurance and retirement planning, highlighting the rise in acceptance of robo services as well as a significant shift in consumer trends, according to a new report by Accenture.
The report, titled “The global Distribution & Marketing Consumer,” is based on a survey of nearly 33,000 consumers in 18 countries and regions. The research found that a vast majority of consumers are willing to receive exclusively robo-generated advice for certain banking and insurance products.
Among the key findings:
- 78% of consumers said they would use a robo-advisor for traditional investing;
- 71% would use a robo-advisor to help determine which bank account to open;
- 74% to determine which insurance coverage to select; and
- 68% to help them with plan for retirement.
“We found strong consumer demand exists today for robo-advice in all areas of financial services – banking, insurance and financial advice,” Piercarlo Gera, senior managing director of Accenture Financial Services, said in a press release.
Among the key benefits of robo-advisors, customers cited the prospect of faster (39%) and less expense (31%) service. Customers also believe that computers and artificial intelligence are more impartial and analytical than humans (26%).
However, the report also suggests that consumers still need human interactions with nearly two-thirds of claiming so. They named complaints (68%) and advice about complex products such as mortgages (61%) as the key areas which needed a human touch.
“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,” Gera said.
“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.”
Emerging countries are the ones that have the biggest appetite for robo-advisory with the top three countries being Indonedia, Thailand and Brazil.
Emerging consumer trends
Besides the growing acceptance of robo-advisors, the report also identifies other key emerging consumer trends.
Notably, it suggests that younger generations, especially Gen Y and Gen Z (millennials and post-millennials), are more drawn to the “GAFA” (Google, Apple, Facebook and Amazon) model. These are considered attractive alternatives to traditional financial providers.
40% of Gen Y respondents said they would consider banking with Google or Amazon. The figure rises to 50% of markets such as the US. 36% would consider buying insurance from an online service provider, and 46% would consider purchasing investment advisory services from a non-traditional provider.
“Consumers expect nearly all of their transactions to be on par with the service they receive from GAFA companies, which poses a challenge for banks in particular,” said Alan McIntyre, senior managing director and head of Accenture Banking.
“Banks need to create branches that provide an advanced digital experience combined with convenient locations, while also developing an online digital experience that can compete head on with the tech giants.
Tailored advice related to product selection and asset allocation are key to a successful relationship between customers and their financial providers, the report says, as consumers are increasingly demanding personalized interactions that are relevant to their financial needs and objectives.
“The vast majority of today’s consumers view their bank relationships as entirely transactional; in order to gain customer loyalty, banks have to be more assertive in using technology to provide tailored, personalized offerings when, where and how customers want them,” McIntyre said.
Featured image: 2017 Global Distribution & Marketing Consumer, Accenture
