Over the past few years banks have invested billions of dollars in their IT systems to improve both their reliability and to provide additional hi-tech services to their customers. The question arises: Are their customers interested in adopting these technology services?
In recognition that the market needs to understand the rapid changes in technology and their impact on consumers and businesses, Roy Morgan Research has completed a major study of technology and how Australians adapt and use it. The study explores the convergence of social media, mobile usage, faster Internet speeds with unlimited downloads and new payment systems to develop a model of technology adoption by Australians.
This “Digital Universe”, splits Australians by their interest and use of technology into six segments. In order of declining technology interest these are: “Technology Early Adopters”, “Professional Technology Mainstream”, “Digital Life”, “Older Tech Explorers”, “Technology Traditionalists” and “Technophobes”.
As may be expected different banks appeal to different Technology Segments. HSBC has the highest proportion of its customers falling into the “Technology Early Adopters” Segment (27.9% of its customers) followed by Citigroup (20.3%), ANZ (19.3%, highest of the majors), Westpac (18.4%), NAB (18.2%), CBA (17.2%) and Building Societies & Credit Unions as a whole (13.7%).
At the other end of the spectrum, “Technophobes” and “Technology Traditionalists” who are the laggards of technology adoption should not be ignored entirely as they make up a large proportion of an institution’s banking customers. Building Societies & Credit Unions as a whole have the highest proportion of “Technophobes” and “Technology Traditionalists” at 50.6% followed by NAB & Westpac (both with 42.4%), CBA (41.7%), ANZ (39.9%), Citigroup (35.3%), and HSBC (27.6%).
It has become increasingly evident that institutions must not only design innovative new banking technologies for the tech savvy customer but also cater to the needs of the late majority and laggards who are not so inclined or interested to use new technology.
Norman Morris, Industry Communications Director Roy Morgan Research says:
“With the rapid increase in mobile technology, financial institutions have long been focussing on introducing mobile banking applications, thus making it easier for customers to do their banking on the go but this raises all sorts of questions such as, ‘is it safe and secure’? What needs to be done to make sure customers in the later technology adoption segment are ready and willing to take up these technologies? Are there educational and training programs in place for those that are intimidated by and don’t know how to use such technologies?
“Technology Early Adopters” are an important segment because they are the first individuals to purchase and use a new technology. They present an opportunity for institutions to tailor their online or mobile offerings to this segment. They are more likely to be young people and mature adults aged between 18 and 40 who are well educated, employed full-time, and earning an above average income. As such, their combination of higher income and risk taking behaviour enables them to readily take up new online banking technologies and mobile apps. It is interesting to note that Early Adopters and Professional Mainstream make up more than 50% of HSBC banking customers.
“On the other hand, “Technology Traditionalists” and “Technophobes” hold conservative values, are wary of change and are usually the last to take up new technologies. “Technology Traditionalists” are not great lovers of technology and really only take it up once it becomes mainstream. “Technophobes” will only adopt technology when they are forced to; due to disinterest and lack of needing technology in order to fulfil their lives. “Technophobes” are likely to be aged between 60 and 80, with low education, low income and lower socio-economic status. As such, institutions need to find effective ways to engage with this group so as to demonstrate the value and use technology can bring to their lives. Financial institutions such as Building Societies and Credit Unions need to pay particular attention to engage the late majority as they constitute more than 50% of their customer base.”
For comments or more information please contact:
Norman Morris, Industry Communications Director
Telephone: +61 (3) 9224 5172
Mobile: +61 402 014 474
IMAGE: Banking Customer Technology Adoption Segments, Source: Roy Morgan Single Source, Australians 14+, 12 months to September 2013, sample size = 49,846
Roy Morgan Research
Roy Morgan Research is Australia’s best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
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