ACXIOM THE ADOPTION OF FINTECH

THE ADOPTION
OF FINTECH
ACXIOM THE ADOPTION OF FINTECH

CONTENTS

Executive summary 2
Background 5
Current status of fintech 7
Why most fintech users have traditional banks too 8
The value of security 12
What fintech brings to the table 15
Key learnings for traditional banks 20
How Acxiom can help 23
About Acxiom 24

2
ACXIOM THE ADOPTION OF FINTECH

EXECUTIVE SUMMARY

The UK is a global hub for fintech and it has
seen rapid growth in recent years, fuelled
by the latest wave of digital innovation,
significant investment from the private sector,
a favourable regulatory environment and a
deep pool of entrepreneurs ready to meet
new consumer needs.
According to the latest figures provided by the Department for Trade, there
are over 1,600 fintech firms in the UK and this will more than double by
20301. In 2019, investors put more money into UK fintech than the next
10 European countries combined, rising from $3.6bn in 2018 to $4.9bn
in 20192.
Along with a fertile environment for fintech businesses, there is a clear
appetite for these products and services among UK consumers. The UK’s
fintech adoption rate is 42%, significantly above the global average of 33%3.
We asked 4,000 consumers and 500 digital banking users about their
views on banking and use of fintech to provide a deeper understanding
of this growth from their perspective. The focus of this report is therefore
on digital banks in the consumer banking sector and the key learnings for
traditional banks.

While 19% of the UK now use a fintech brand, and that number is growing,
very few people have made the complete switch from a traditional bank

42%
is the UK’s fintech adoption
rate, significantly above the
global average of 33%
to a fintech bank. Among fintech users, 99% still have a traditional bank,
and only 15% consider it to be their “main” account. People have kept their
traditional banks for three core reasons: habit, inertia and perceived offering.
However, there is also the indication that people are becoming more open to
the idea of having a portfolio of accounts that best address a range of needs.
A quarter of fintech users already use more than one fintech brand, and
they clearly point to for example, Revolut’s exchange rate, Monzo’s financial
management tools, Atom Bank’s saving rates as differentiators. This could
be the most significant long-term impact of the fintech evolution, especially
as younger consumers are the main fintech users.

Two-thirds of fintech users say they intend to close their traditional bank
account in the next few years, and just under a quarter plan to in the next

1
UK fintech – state of the nation (Department for International Trade)
2
2019 fintech investment landscape (Innovate Finance)
3
UK fintech – state of the nation (Department for International Trade) 3
ACXIOM THE ADOPTION OF FINTECH

Executive Summary

year. The main reason they haven’t closed their bank account is the range
of services provided. The biggest motivator to switch would be relevant and
valuable use of personalisation – the kind suggested by Revolut’s Perks
cashback deals. Second to that is demonstrating that they were safer than
traditional banks.

There are a variety of reasons for using a fintech brand, but the common
themes are they are better for travelling, they are easier to use, and friends
or family persuaded them it was worth trying. In terms of what fintech
brands do better, the consensus is quite a lot – and they’re all important.
Fewer fees, more control, better user experience and more.

Traditional banks are primarily associated with being safe, reliable and
trustworthy. The financial crisis looms large in the minds of many and is Two-thirds of fintech users say they intend
part of the reason their customers stay loyal. People are wary of the risks in
banking and going with a new kind of bank is an additional risk not worth to close their traditional bank account in
taking. While current fintech users expressed very little concern about the the next few years
long-term stability of fintech, N26’s recent pull-out of the UK market will only
add to the concerns of everyone else.

Over the next few years, you would expect key barriers for fintech
companies to fade. They will be more proven, particularly if they
successfully navigate through a recession, and the fear around any
banking changes from the financial crisis will soften. In which case, the
demand for digital innovation in traditional banking will only grow. There is
appetite for newer technologies such as biometric or mobile ATMs, voice
recognition and AI-powered personalisation. What people value most
currently is the customer-centric, convenient user experience. With the
deployment of open banking, a generational shift in perceptions of data
sharing, and the development of the Software-as-a-Service.

4
ACXIOM THE ADOPTION OF FINTECH

BACKGROUND

A nationally representative sample of 4,000 people were surveyed to
measure some of the established megatrends – environmentalism,
desire for authenticity, connected worlds creating disconnected
societies – and explore how they connect to sector-specific trends.
This was within 6 key sectors:
1 Automotive
The overarching objective was to understand what direction society is
moving and how businesses in these industries should prepare for this,
both in terms of risk mitigation and innovation.
This was followed up by surveying a sub-section of the population in each
industry that were particularly close to the trends, to dig deeper into
what is driving them and understand what the early adopters or enthusiasts
believe are most worthy of attention. The sub-section included:

2 Consumer electronics
Car enthusiasts
3 Financial services
Fintech users
4 Telecoms

Shopping enthusiasts
5 Retail

6 Travel
Cord-cutters

Authentic travellers

Digital detoxers

5
ACXIOM THE ADOPTION OF FINTECH

In this case, the focus is on fintech enthusiasts. You can find a profile of
them to the right. They will be the key feature of analysis, as we asked them
the most probing questions, and their interest in the subject allowed them
to give more thoughtful answers than your average person. FINTECH
USERS
A secondary feature of the analysis will be the nationally representative
audience, with a particular focus on how attitudes and behaviours differ
across generations. Here is a profile of each generation from the nationally
representative survey.
Use an average
This will be supported by secondary research from a variety of sources, of 2 bank accounts,
to provide an international and historical context with hard numbers where More male, mostly
the vast majority currently
Gen Z and Millennials,
possible. They will be cited throughout the report. have a traditional bank
more urban and particularly
account, and the majority
prevalent in London but
plan to switch over to a
present in all areas
fintech bank fully in
a few years

Profile of each generation from the nationally representative survey

Gen Z Millennials Gen X Baby Boomers The Silent

Generation

Years born 1998-2004 1981-1996 1965-1980 1946-1964 1928-45

Age 16-22 23-38 39-54 55-73 74-91
Relationship status Mostly single Mostly married Mostly married Mostly married Mostly married
Working status Mostly students Mostly employed full time Mostly employed full time Mostly retired Mostly retired
Independence vs.
Obedience Independence Independence Independence Mixed Obedience
Security vs.
Convenience Mixed Mixed Mixed Security Security

6
ACXIOM THE ADOPTION OF FINTECH

CURRENT STATUS OF FINTECH

Excitement for new banking tech
19% of the UK now use a fintech brand, and that number is
growing, but very few people have made the switch from a Fintech brand use
AI-powered image scanning 61% 28% 11%
traditional bank to a fintech bank. Among the 19% of fintech users AI-powered personalised offers 60% 30% 10%
Monzo
in the UK, 99% still have a traditional bank, and more than half of 8%
56% 29% 15%
Starling Bank Biometric
6%
ATMs
fintech users have 3 or more banks. Most importantly, only 15% of AI-powered personalised savings advice 53% 34% 14%
I don’t see
Revolut 6%
fintech users consider a fintech brand to be their “main” account. Mobile
Atom Bank 3% ATMs 53% 26% 21%

Monese Voice
2%recognition 50% 31% 19%
That could mean that the early adopters of fintech are more inclined to It’s too co
N26 1% Chatbots 41% 35% 24%
have a portfolio of accounts and are generally less “brand loyal”, or the 16%16%
Iw
Tide 1% 6%
way fintech brands are positioned makes them particularly well suited Bó Excited Neither Concerned
1%

1% Monzo
to developing a portfolio. It could also be an early sign of the direction None of these 81%
consumer preferences are moving in, which would have significant
implications for the future of the banking industry.

This has been touched upon in the past4 and there are no simple, Number of bank accounts
conclusive answers to it, but we can get some indication from current C
fintech users: why have they kept their traditional bank accounts, what Main bank
appealed to them about the fintech brands, and what is their plan in 1 1%
the future? Fintech brand (NET) 15%
Barclays
2 14%
45% Do
Natwest 12%
Before we get into that, we thought it was worth understanding what the Lloyds 11%
current consumer understanding of “fintech” was. While some people were 3
Santander 25% 11%
HSBC
unsure, others had a very clear perspective on the benefits its role plays Nationwide
11%
9%
within the wider financial industry. 4+
Starling Bank 28%
8%
N
Monzo 5% bu
TSB 5%

“
Revolut 3%
It is the combination of technology and finance, financial Atom Bank 2%
RBS 2%
technology, to provide better, more innovative and more effective BOS 2%
solutions such as apps for managing and maximising financial Co-operative 1%
organisation and capability. Clydesdale (Virgin Money) 1%
Metro 1%
Yorkshire 1%
Monese 1%
N26 1%
Bó 0%
MBNA 0%
4
UK fintechs aren’t eating the banks’ lunch just yet (Financial Times) 7
Tide 0%
 Tide 1% 6%
1%

Bó 1% Monzo
None of these 81%

ACXIOM THE ADOPTION OF FINTECH

Main bank

Fintech brand (NET) 15%

Barclays 14%
Natwest 12%

“
Lloyds 11%
The use of technology to compete with traditional methods in Santander 11%
HSBC 11%
the delivery of financial services. An emerging industry that Nationwide 9%
uses technology such as smartphones for mobile banking, Starling Bank 8%
N
Monzo 5%
investing services and cryptocurrency to make financial services TSB 5%
bu

more accessible. Revolut 3%

Atom Bank 2%
RBS 2%
BOS 2%
Co-operative 1%
Clydesdale (Virgin Money) 1%
Why most fintech users have traditional banks too Metro 1%
Yorkshire 1%
Monese 1%
People have kept their traditional bank for a variety of reasons, but they N26 1%
can be grouped together into three broad themes: habit, inertia and Bó 0%
perceived offering. MBNA 0%
Tide 0%

The single most common reason for keeping a traditional bank account
is because people like being able to go into the bank – it’s a habit. After
that, people simply question what benefits they would see from getting
Excitement for new banking tech Reasons for a traditional bank account
rid of it, or generally find it too complicated to close the account – inertia.
Those two answers combined are the most popular explanation. Finally,
Inertia (NET) 43%
people think AI-powered
that theirimage
traditional
scanning bank simply
61%has better rates,
28% or a bigger
11%
Services (NET) 41%
range of services – the perceived offering. The least popular answer is
AI-powered personalised offers 60% 30% 10%
I like being able to go into the bank 33%
that people worry these fintech
Biometric ATMs brands might
56% not last, so 29%
they keep
15% the
I don’t see any benefits from getting rid of the traditional bank account 29%
traditional bank
AI-powered for security.
personalised savings advice 53% 34% 14%
My traditional bank has a bigger range of services 29%
Mobile ATMs 53% 26% 21%
My traditional bank gives me better rates 18%
Voice recognition 50% 31% 19%
It’s too complicated to close my account (and all associated bills etc.) 18%
Chatbots 41% 35% 24%
I worry these ‘fintech’ brands are just a fad, and might not last 15%
Other (please specify) 6%
Excited Neither Concerned
None of these 6%

Number of bank accounts 8

Cybersecurity preferences - fintech vs. traditional
by fintech brand - main account
 64%
62%

ACXIOM THE ADOPTION OF FINTECH

16%16%
11%11% 11% 5%
6% 5% 5%
6% 5% 4% 3% 5% 0% 4%
2% 1% 3%1% 0% 0% 3% 1% 0%
1% 0% 1% 0% 1% 0% 1% 0% 0% 3%3%1% 0% 0% 0%

Monzo Starling Revolut Atom Monese N26 Tide Bó None of

81% Bank Bank these

Gen Z (16-22) Baby Boomers (55-73)

Millennials (23-36) The Silent Generation (74+)
Gen X (39-54)

What that suggests is that if fintech brands can provide the same range of
When expected to go solo fintech services and better rates, they can convince a significant portion – perhaps
15% more than one-third – of their current customers to make them their main
14% bank. Beyond that, if they can make the switching process easier while
In the next year 23% demonstrating the value of making the full switch, they could convince
most of their current customers to switch over. However, we shouldn’t
In the next few years 43% underestimate the power of inertia, and that desire for a physical bank for
one-third of current fintech users (and no doubt many more non-users) is a
Not in the next few years, 25%
but some time this decade significant barrier.
Never 9%
66% of fintech users say they intend to close their traditional bank account
in the next few years, and just under 25% in the next year. The main reason
they haven’t closed theirBenefits bank account of fintechis thebrands
range of services provided.
For the quarter of fintech users who don’t intend to in the next few years,
Reasons for traditional bank account by but will sometime this decade, Fewer their
hidden reasons
fees are dominated
61% by habit
31% and7%
when expected to go solo fintech inertia – almost half of them likemore
I have being
controlable to go into
61% a bank, and 33%don’t
7% see
any benefits from switching, It’s while
easierthe range of services
to use 61% is less important.
33% 7%
Only a minorityIt helpsof fintech
me manage users never
my money intend to close
better 59% their traditional
35% bank,
6%
48% 50%
48%
44%
41% 41%
but when probed,
It allows me most
to see more detail of
aboutthem said they would58%
my transactions consider switching
36% fully
7% if
34%
37% 39%
37%
30% 29%
34% 34% 33%
34% certain conditions were Great met.customer service 56% 37% 6%
28% 28% 26%
27%
20% 20% 22% It provides more up to date information 55% 38% 7%
18% 17%
17% 15%
15%
11%
13% 14%
11% Better for travelling abroad 52% 37% 10%
9% 7% 6%
4% 5%5% 5%
3% It gives me a personalised experience 49% 42% 9%
Inertia Services I like I don’t My My It’s too I worry Other None of Easier to pay friends / family 48% 45% 7%

66%
(NET) (NET) being see any traditional traditional complicated these (please these
able to go benefits bank has bank to close ‘fintech’ specify)
into the
bank
from
getting rid
a bigger
range of
gives me my account brands
better (and all are just a Essential / very important of Somewhat
fintechimportant
users say
Not they
importantintend
of the services rates associated fad, and
traditional
bank
bills etc.) might not
last
to close their traditional bank
account
account in the next few years
In the next year Not in the next few years, but some time this decade
In the next few years Never
Q. Which of these words or phrases do you think
apply to these companies?
Correspondence analysis
Motivations for solo fintech 9

40% 0.2
ACXIOM THE ADOPTION OF FINTECH

The profile of modern shopping

Benefits of fintech brands

Reasons for traditional bank account by Fewer hidden fees 61% 31% 7%
when expected to go solo fintech I have more control 61% 33% 7%
Excitement for new banking tech Reasons for a traditional
It’s easier to use bank61%
account 33% 7%
It helps me manage my money better 59% 35% 6%
48% 50%
48%
44% It allows me to see more detail about my transactions Inertia 58%
(NET) 36% 7%
43%
However, fintech
34%
37% brands
AI-powered
39%
37% image can’t
scanningrest on their61%
41%

34%
41%

34% 33%
laurels. Only 7%28%
34%
of those 11% who
Great customer service 56% 37% 6%
Services (NET) 41%
do intend to switchpersonalised
say theyoffers don’t need anything more, they just haven’t
30% 29%
AI-powered 28%
27% 60%
28% 26% 30% 10%
22% It provides more up to date information 55% 38% 7%
I like being able to go into the bank 33%
got around to it. The Biometric vast majority are planning on switching because
20% 20%
56% 18%
29% 15%
RELEVANT AND VALUABLE
ATMs 17% 15%
17%
52% 37% 10%
15% 13% 14%
11% Better for travelling abroad
11%
I don’t see any benefits from getting rid of the traditional bank account 29%
they’re expecting
AI-powered fintech
personalised brands
savings advice to grow their 53% offering. There
9%
34% is an
3%
14% 7%
4%
6%
5%5% 5%
It gives me a personalised experience 49% 42% 9%
My traditional bank has a bigger range of services 29%
expectation that fintech providers will not only match the range of services
Inertia
provided
Services
(NET) by(NET)
traditional
I like
Mobile
Voicebanks,
being
ATMs
I don’t
see any but
recognition
able to go benefits
My
provide
traditional
bank has
My
50%
53%

bank
added
traditional
It’s too

to close
value
complicated
26%
I worry
beyond
these
31%
Other
21%
what
(please
19%
‘fintech’ specify)
None of
they
these PERSONALISATION
Easier to pay friends / family 48%
My traditional bank gives me better rates
45%
18%
7%

It’s too complicated to close my account (and all associated bills etc.)
currently do. from a bigger gives me my account brands 18%
into the Chatbots
getting rid range of 41%
bank of the
better
services
(and all 35%
rates
are just a
associated
24%
fad, and
would be the biggest motivatorNottoimportant
Essential / very important Somewhat important
I worry these ‘fintech’ brands are just a fad, and might not last 15%
traditional
The biggest motivator to switch would be relevant bank
Excited
account
bills etc.)
and valuable use of
Neither
Concerned
might not
last switch from traditional banking6%
Other (please specify)

personalisation – the kind suggested by Revolut’s Perks cashback deals. None of these 6%
In the next year Not in the next few years, but some time this decade
Second to that is demonstrating
In the next few years
that
Never
they were safer than traditional banks.
Q. Which of these words or phrases do you think
apply to these companies?
Number of bank accounts
Cybersecurity preferences - fintech
Correspondence analysis vs. traditional
Motivations for solo fintech by fintech brand - main account
1 1%
40% 0.2
Ethical
36% 35% Nationwide
Don’t use fintech brand as main Cares about my needs
2 30% 45% Monzo Starling Bank 17% 19% 44% 14% 7
account (n=412) Halifax %
23% 23% 23% Trustworthy
20% 20%
Safe Natwest

Dimension 2 (11.5%)
3 25%14% 14% 0.0
Innovative Barclays Reliable Lloyds
7% 8%
3% UseModern
fintech brandAtom Bank
as main
4+ 28% 16% 12% 38% HSBC 15%
18%
account (n=73)
If they could If they If they If they had If they could I don’t need Other
Revolut
offer me demonstrated offered me a physical transfer my anything (please
bonuses they were same set of bank loan(s) / more, I just specify) -0.2
and discounts safer services mortgage(s) haven’t Santander
based on my (loans, over the gotten round
purchase overdrafts, same to it 1 - Traditional banks are more secure against fraud
behaviour etc.) or better 2
rates
3 Only interested in profit
Plan (n=341) Don’t plan (n=22) -0.4 4
5 - Fntech banks are more secure against fraud
-0.4 -0.2 0.0 0.2

Dimension 1 (78.2%)
Normalisation: Principal

Rows Columns

10
ACXIOM THE ADOPTION OF FINTECH

Most people think traditional banks and fintech brands are probably equally
well protected against cybersecurity, however there are some distinctions Cybersecurity preferences - fintech vs. traditional
within that. by when expected to go solo fintech

Among those that currently have a fintech brand as their main account,
they lean towards fintech brands being more secure. Those who intend In the next year (n=88) 18% 14% 33% 20% 15%
to get rid of their traditional bank account in the next year lean the same
way, while those who don’t intend to switch in the next few years lean 16% 19% 46% 14% 6
In the next few years (n=160) %
much more towards the security of traditional banks. And when those who 8 3
Not in the next few years, but 13% 30% 46% Ba
don’t intend to switch were asked what would convince them to seriously some time this decade (n=93) %%
consider it, being safer was the number one motivator. 9 6 The Sil
Never (n=35) 31% 11% 43%
% %

1 - Traditional banks are more secure against fraud

2
3
4
5 - Fintech banks are more secure against fraud

Security vs. convenience in financial

services by generations

Gen Z (16-22) 25% 23% 37% 8% 7%

Millennials (23-38) 25% 23% 37% 9% 7%

Gen X (39-54) 38% 27% 27% 5% 3% B

52% 23% 22% 2% The S

Baby Boomers (55-73) 1%
The Silent Generation (74+) 59% 21% 19% 1%
0%

1 - I want security much more than convenience

2
3
4 11
5 - I want convenience much more than security
ACXIOM THE ADOPTION OF FINTECH

THE VALUE OF SECURITY Cybersecurity preferences - fintech vs. traditional

by when expected to go solo fintech

In the next year (n=88) 18% 14% 33% 20% 15%

16% 19% 46% 14% 6

In the next few years (n=160) %
Almost everyone cares about security in banking – it is a question
of how much, and what are the trade-offs. One of the most notable Not in the next few years, but 13% 30% 46%
8 3
%%
B
some time this decade (n=93)
trends in banking over the last decade or so has been a move
9 6 The S
towards convenience, at the expense of security. For example, Never (n=35) 31% 11% 43%
% %
contactless cards are much more convenient, but they make
theft easier.
47% of those whobanks
1 - Traditional earn upsecure
are more to £20k say they
against fraud
2
Some people are more comfortable with that trade-off than others. want security
3 much more than convenience
4
In general young, single, affluent men are more comfortable with that
5 - Fintech banks are more secure against fraud
trade-off than older, married, less affluent women. 47% of those who earn
up to £20k say they want security much more than convenience, compared
to 32% of those who earn £40k+. 44% of women say it vs. 34% of men.
25% of millennials say it vs. 52% of Baby Boomers. Security vs. convenience in financial
services by generations
It also happens to be the case that young, single, affluent men are more
likely to be fintech users currently, and fintech users overall are the group Gen Z (16-22) 25% 23% 37% 8% 7%

most comfortable with the trade-off. So, there is reason to believe that Millennials (23-38) 25% 23% 37% 9% 7%
security is one of the unspoken barriers to fintech adoption. Even fintech
users debate how secure their bank is5. To many, it’s a more subjective Gen X (39-54) 38% 27% 27% 5% 3%

question than one might imagine. Baby Boomers (55-73) 52% 23% 22% 2% The S
1%
The Silent Generation (74+) 59% 21% 19% 1%
What that means is there’s an opportunity for both traditional banks and 0%

fintech banks to make the case that they’re more secure, identifying the
most tangible and relevant fears that current and potential customers have, 1 - I want security much more than convenience
and demonstrating that their product is best placed to deal with them. 2
If fintech brands want to grow their customer base beyond their current 3
4
core demographic, investing in and demonstrating superior security may 5 - I want convenience much more than security
be the most impactful way to do so.

5
Security: no 2-Step authentication for payments? (Monzo Forums) 12
 ACXIOM THE ADOPTION OF FINTECH

CURRENT PERCEPTIONS OF THE

OMNICHANNEL EXPERIENCE
Underpinning that desire for security is always fear, and more than anything
else it is the fear of the unknown that paralyses us. In that sense, it should
be no surprise that the more tech-savvy younger generations are less
worried about cyber security threats. Just over half of millennials consider
a bank’s cyber security to be very important, compared to 87% of Baby
50%
Boomers. That trend holds true for fintech users and non-fintech users. of millennials consider a bank’s cyber
security to be very important, compared
Just over one-third of Millennials have a fintech account currently, and of
those who don’t, more than half of them are open to moving away from to 87% of Baby Boomers.
their traditional bank. What they are offering is more relevant to younger
consumers, and they’re more open to trying something new.

Benefits
Cybersecurity of fintech
preferences brands
- fintech vs. traditional Importance of bank’s cybersecurity
by when expected to go solo fintech by generations
Fewer hidden fees 61% 31% 7%
I have more control 61% 33% 7% Gen Z (16-22) 48% 31% 18% 3%
It’s easier18%
In the next year (n=88) to use14% 33% 61% 20% 15% 33% 7%
Millennials (23-38) 51% 43% 5% 1%
It helps me manage my money better 59% 35% 6%
It allows me In
tothe
seenext
morefew
detail about 16% 19%
my transactions 46%
58% 14% 6 36% 7%
years (n=160) % Gen X (39-54) 66% 29% 5% 0%
Great customer service 56% 37% 6%
Not in the next few years, but 13% 8 3 Baby Boomers (55-73) 3%
30% 46% % %38% 87% 10%
It provides
some more
time this up to(n=93)
decade date information 55% 7% 0%
7%
11% Better for travelling abroad 52% 9 6 37% 10% The Silent Generation (74+) 88% 12% 0%
Never (n=35) 31% 11% 43%
5%5% 5%
It gives me a personalised experience % %
49% 42% 9% 0%
None of Easier to pay friends / family 48% 45% 7%
e these Very important Not very important
y) 1 - Traditional banks are more secure against fraud
2 important Somewhat important Not at all important
Essential / very Somewhat important Not important
3
4
5 - Fintech banks are more secure against fraud

Q. Which of these words or phrases do you think Traditional vs. new banking by generations
Security
applyvs.
toconvenience in financial
these companies? 13
services by generations Gen Z (16-22) 47% 13% 32% 4 4
%%
ACXIOM THE ADOPTION OF FINTECH

Cybersecurity preferences - fintech vs. traditional Importance of bank’s cybersecurity

There is still a large target market there and strategically it may make
by when expected to go solo fintech by generations
sense to continue to focus the product
Fintech development
brand use and marketing Fintech brand use by generations
strategy on that core audience.
Gen Z (16-22) 48% 31% 18%97% 3%
Monzo 8% 94%
In the next year (n=88) 18% 14% 33% 20% 15%
However, when
Starling the
Bank time 6% comes to expand beyond them, if they can Millennials (23-38) 51% 43%
85%
5% 1%
leverage thatIn the
positioning
Revolut as
6% modern,
next few years (n=160)
16% agile
19% and tech-savvy
46% and
14% 6 reframe 64%
62%
% Gen X (39-54) 66% 29% 5% 0%
it in a cyber Atom
securityBank context,
3% it’s likely their offer will become much more
appealing tosome
Baby
Not Monese Boomers
in the next 2%years, in
few
time this decade (n=93)
butparticular
13% – and they
30% will still%8hold
46%
3
% the Baby Boomers (55-73) 87% 10% 3%
0%
N26 1%
nation’s purse strings for the foreseeable future. If they can also add The Silent
16%16%
Generation11%(74+) 88% 12% 0%
Tide 1% 31% 11% 43% 9 6 11%11% 5%
new security capabilities, they’ll
(n=35) further solidify their positioning
% % among
5%
Never 6% 5% 6% 5%
2% 1%
4% 3% 5% 0% 4%
3%1% 0% 0% 3% 1% 0%
1% 0% 1% 0% 1% 0% 1% 0% 0% 3%3%1% 0% 0% 0%
Bó 1% 0% of
Millennials as being innovative, while bolstering something everyone Monzo Starling
Bank
Revolut Atom
Bank
Monese N26 Tide Bó None
these
None of these 81% Very important Not very important
deems important. 1 - Traditional banks are more secure against fraud
2 Somewhat important Not at all important
Gen Z (16-22) Baby Boomers (55-73)
3 Millennials (23-36) The Silent Generation (74+)
4 Gen X (39-54)
5 - Fintech banks are more secure against fraud

Main bank
Traditional vs. new banking
When expected by generations
to go solo fintech
Security vs. convenience in financial
Fintech brand (NET) 15%
Barclays services by generations 14% Gen Z (16-22) 47% 13% 32% 4 4
%%
Natwest 12% In the next year 23%
Lloyds
Gen Z (16-22) 25% 23% 37% 11% 8% 7% Millennials (23-38) 42% 17% 29% 7% 4
%
Santander 11%
HSBC (23-38) 43% 3%
Millennials 25% 23% 37% 11% 9% 7% In theGen
next
X few years
(39-54) 53% 18% 23% 2%
Nationwide 9%
Starling Bank 8% Baby 2%
Gen X (39-54) 38% 27% 27% 5% 3% Not in Boomers (55-73)
the next few years, 70%
25%
13% 14%
1%
Monzo 5% but some time this decade
TSB 2% 1%
Baby Boomers (55-73) 52%5% 23% 22% 1%
The Silent Generation (74+) 81% 9% 10%
0%
Revolut 3%
Never 9%
Atom
The Silent Bank (74+)
Generation 2% 1%
59% 21% 19% 0%
RBS 2%
BOS 2% 1 - Stay with my traditional bank
Co-operative 1% 2
Clydesdale (Virgin Money) 1 - I want
1% security much more than convenience 3
Metro 2 1% 4
Yorkshire 3 1% 5 - Switch to new ways of banking
Monese 4 1%
N26 1%
5 - I want convenience much more than security
Bó 0%
MBNA 0% 14
Tide 0%
ACXIOM THE ADOPTION OF FINTECH

WHAT FINTECH BRINGS

TO THE TABLE
There are a variety of reasons for using a fintech brand, but the
three common themes are they are better for travelling, they are
easier to use, and friends or family persuaded them it was worth
seeing what they’re like. Let’s unpack each of those a little.

In what sense are they better for travelling?

Here’s some quotes from fintech users:

“
The ease of using them. Getting to what you need to do is easily
accessible. Real-time transactions (you get a notification every
time a payment goes through), adjustable overdrafts with very
little daily charge amounts.

I was curious, so I opened an account with Revolut. Surprisingly

it is much easier and quicker sign up and get it working than
those in the high street.

Easy to use and convenient. I like the multiple savings pots

available to save into and being able to review all my money and
spends in a review format.

15
ACXIOM THE ADOPTION OF FINTECH

What was it that friends and family recommended to them

that they wanted to experiment with?
Here’s some quotes from fintech users:

“
Recommended by family member and the convenience
of being able to convert sterling to other currencies while
travelling and getting a great exchange rate.

I was aware of them when they started, and then more and
more friends were switching to them and saying it was great,
so I decided to give it a go.

My boyfriend explained how the layout of the bank let you

know what you spend your money on in percentage and can
help budgeting.

Wanted to experiment and try out their spending analytics.

The thing enabling all three of these things is the setup process – people
are willing to set up a new bank account to go travelling or to explore a
different user experience because the setup process is so painless. More
than half of fintech users said they found the setup process “easy”, while
a minority thought it was “confusing”. They find out about it through
friends, family or online advertising, and they sign up because the
process is so convenient.

16
ACXIOM THE ADOPTION OF FINTECH

These lower barriers to entry make it more likely that people will sign up
to individual fintech brands, but it also changes people’s perceptions How did you hear about fintech brands?
on banking – the average fintech user has more than one fintech brand
because that is now achievable with minimal effort. That in turn opens the Friend 27%
possibility to have a portfolio of banks which each specialise in different Online 26% Very com
Family 7%
areas – Atom Bank for saving, Revolut for the exchange rate, Monzo for Social media 4%
budget management, etc. That, more than anything, may be the shift TV 4%
Facebook
brought about by fintech brands. Martin Lewis
2%
2%
Google 2%
In terms of what fintech brands do better, the consensus is quite a lot – and Word of mouth 2%
Youtube 1% Not at all co
they’re all important. Fewer hidden fees, more control, easier to use, helps Other 22%
manage money, provides more detail about transactions, great customer
service, more up to date information, better for travelling abroad, providing
a personalised experience, making it easier to pay friends / family. More
than half of all fintech users think almost all of these benefits are essential or
very important. 90% think they’re at least somewhat important. Benefits of fintech brands

In terms of perceptions,
Reasons fintech brands arebank
for traditional clearly distinguished
account by from Fewer hidden fees 61% 31% 7%
traditional brands aswhen beingexpected
modern and to go solo fintech are also
innovative, but they I have more control 61% 33% 7%
distinguished on the basis of being seen as less trustworthy and reliable. It’sServices
easier to use used 61% 33% 7%
What gives them the reputation of being innovative is the same thing that
48% 50%
It helps me manage my money better 59% 35% 6%
60%
is allowing them to disrupt the market, but long-term it is questionable if
48%
44%
41% 41%
It allows me to see more detail about my transactions 58% 36% 7%
39% 50%
that can sustain them. While the general move towards more convenience
37% 37%
34%
30%
34% 34% 33%
34%
44% Great
44% customer service 56% 37% 6%
28% 29%
28% 40% 40%
26% 37%
at the expense of less security has shown that there is room for significant
27%
20% 20% 22% It provides more up to date information 55% 33%
38% 7%
18% 28% 29%
17% 17% 28%
change in banking priorities, it is difficult to imagine trust, reliability and
15%
15%
11%
13% 14%
11% 25% Better
26% for travelling abroad 52% 37%
22%
10%
9% 7% 6% 17% 19% 16% 17%
4%
safety being downgraded to secondary priorities when choosing your
5%5% 5%
3% It gives me a personalised experience 15% 49% 11%12% 42%
14% 9%
6% 5%
Easier to pay friends / family 48% 45% 7%
main Inertia
bank.
(NET)
Services
(NET)
I like
being
I don’t
see any
My My It’s too
traditional traditional complicated
I worry
these
Other
(please
None of
these
able to go benefits bank has bank to close ‘fintech’ specify)
from a bigger gives me my account brands Paying abroad Debit card / Savings Overdraft Paying Mortgage +
into the Essential / very important Somewhat important
bank
getting rid
of the
range of
services
better
rates
(and all are just a
associated fad, and + exchanging account account + credit card the bills + Notother
important
loan
traditional bills etc.) might not money + ISA /account receiving
bank last your salary
account

In the next year Not in the next few years, but some time this decade Monzo (n=202) Starling Bank (n=155)
In the next few years Never
Q. Which of these words orBarclays
Revolut (n=112)
phrases(n=107)
do you think
17
apply to these companies?
 ACXIOM Benefits of fintech brands THE ADOPTION OF FINTECH

Fewer hidden fees 61% 31% 7%

I have more control 61% 33% 7%
It’s easier to use 61% 33% 7%
It helps me manage my money better 59% 35% 6%
It allows me to see more detail about my transactions 58% 36% 7%
Great customer service 56% 37% 6%
It provides more up to date information 7% 55% 38%
7% There is some suggestion that it’s the online only nature that creates this
Better for travelling abroad 52% 37% 10%

“
11%

5%5% 5%
perception, which would necessitate a complete cultural shift in how
It gives me a personalised experience
online-only banking is viewed, or a fundamental49% 42%
shift in the business 9%
I believe that a lot of people think these banks are a bit of a fad
None of Easier to pay friends / family 48% 45% 7%
e these model. The financial crisis reminded many people that keeping your and because they are online only, some people worry how safe
y)
money safe is not something to take for granted and trusting a digital and trustworthy they are.
Essential / very important Somewhat important Not important
company to do so is still a bridge too far.
There’s no compelling reason to change, people are always
wary of new things and without incentive then it’s unnecessary
e stress. Plus, these new banks aren’t proven yet and with the
recession and things a few years ago people are more wary of
Q. Which of these words or phrases do you think
keeping their hard-earned money safe.
apply to these companies?
Correspondence analysis It’s human nature to be averse to change. We like routine. So
averse to switching to new fintech banks. Also, the rise of the
0.2 fintech bank has come soon after the GFC where the worlds
Ethical
Nationwide banks nearly brought the world to its knees. So, mistrust in
Cares about my needs
Monzo Starling Bank Halifax
banks in general is still strong, so trusting in a completely new
Trustworthy type of bank is a step too far. Concern about cybersecurity may
Safe Natwest
Dimension 2 (11.5%)

0.0
Barclays Lloyds
also be why people cannot bring themselves to trust banks that
Innovative Reliable
%
Modern Atom Bank do not have a physical store presence.
HSBC
Revolut
In today’s technological world, it’s become easier and easier
-0.2
Santander for hackers to become fraudsters and a lot of people feel
vulnerable to websites and technologies that they don’t
understand (especially when those technologies use our
Only interested in profit
-0.4 personal data). If these banks are very new and very reliant
in technology, people are sceptical about their security and
-0.4 -0.2 0.0 0.2
don’t as easily trust them when they may have been with a
Dimension 1 (78.2%)
Normalisation: Principal
particularly well-known, specific bank for many years.
Rows Columns

18
ACXIOM THE ADOPTION OF FINTECH

On the other hand, it may just be a question of time:

“
The majority of older people and pensioners are wedded to
traditional bricks and mortar banks or at least names they know
mainly due to computer illiteracy and fear of the unknown.
(With the next generation...), the digital and challenger banks
will flourish if they continue to offer better rates and a better
customer experience.

I think they probably consider it’s insecure. I don’t really

know what can help to convince them. Maybe sharing more
information about security system and immediate assistance in
case of the fraud.

19
 How did you hear about fintech brands?

Friend 27%
ACXIOM THE ADOPTION OF FINTECH
Online 26% Very com

KEY LEARNINGS FOR

Family 7%
Social media 4%
TV 4%
Facebook 2%

TRADITIONAL BANKS
Martin Lewis 2%
Google 2%
Word of mouth 2%
Youtube 1% Not at all co
Other 22%

At the moment, many fintech users have a transactional relationship

with their fintech brands, based around single use cases. Revolut
is used primarily for its exchange rate, Atom Bank is used primarily
for its savings rates, Starling and Monzo are a little more multi-
functional with debit, credit, exchanging and savings, but they can’t
be compared to traditional banks in that regard, and are primarily
used for convenience.
Services used
Despite many big banks being contributors to the financial crisis, they
are primarily associated with being safe, reliable and trustworthy, and
60%

50%
there doesn’t appear to be any perception of being unethical or putting 44%
40%
44%
40%
37%
themselves before their customers. In fact, for some people the financial 28% 29%
33%
28%
crisis is part of the reason their customers stay loyal. People are wary of 25% 26%
19% 16%
22%
17% 17%
the risks in banking and going with a new kind of bank is an additional risk 15% 12%
11%
14%
6% 5%
not worth taking.
Paying abroad Debit card / Savings Overdraft Paying Mortgage +
+ exchanging account account + credit card the bills + other loan
money + ISA /account receiving
It’s necessary for traditional banks to your salary

innovate...even if that means directly Monzo (n=202) Starling Bank (n=155)

replicating some of the things fintech Revolut (n=112) Barclays (n=107)
brands have become known for

Over the next few years, you would expect both of those barriers for fintech
companies to fade away. They will be more proven, particularly if they
successfully navigate through a recession, and the fear around any banking
changes from the financial crisis will soften, all while the number of fintech
users grow, familiarity continues to grow through word of mouth, and they
advertise more.

20
ACXIOM THE ADOPTION OF FINTECH

In which case, it’s necessary for traditional banks to innovate before fintech

“
brands find themselves in a genuinely threatening position, even if that
means directly replicating some of the things fintech brands have become Just keep on doing what you’re doing. There’s a lot of
known for: people who would never switch.

Their physical presence is their biggest asset - stop closing

branches and encouraging people online and onto apps

“
They must adapt to compete with competition whilst not
which is where fintech have their strengths; people will
compromising on what makes them so great in the first place.
make use of your technology if and when it suits them.
For example, one other thing that drew me to a Monzo account
was the money pots that you could name and save informal
amounts of money. A month later my traditional bank has made
the exact same thing and so by Lloyds being on their toes I
To keep fintech users from moving away from their traditional banks,
literally don’t have to use my Monzo unless I’m a bit bored and
bringing in new technology before fintech brands will eventually be
want to move money about. Lloyds is always coming up with
required. In terms of what is immediately on the horizon, more than
new updates. Its great!
half of fintech users are excited about biometric or mobile ATMs, voice
recognition and AI-powered personalisation.
They need to get back into innovation. The trouble is the classic
banks have only ever had each other to compete with and they
What people are most excited about are AI-powered personalised
were all much and such the same.
offers, and almost two-thirds of fintech users are comfortable with banks
sharing their financial data with a 3rd party (e.g. a coffee company)
in exchange for discounted purchases. Gen Z and Millennials are
particularly comfortable with sharing their data if they can see direct
On the other hand, there is very limited differentiation among traditional benefits. Revolut are developing their offering in that space currently,
banks, and that has been true for many years. Now with fintech brands but they lack the volume of data and the partner networks that many
clearly dominating the modern and innovative space, that lack of traditional banks can leverage.
differentiation may become more problematic. The ability for traditional
banks to manoeuvre out of that is difficult because a significant portion Rather than seeing this as a zero-sum game and a threat to
of their customer base want things to stay exactly as they are – or even eliminate, there is growing evidence that traditional banks can
reverse some of the recent changes. benefit more from partnering with fintech banks.

21
ACXIOM THE ADOPTION OF FINTECH

Open banking has created the best conditions for industry collaboration,
a generational shift in consumer perceptions to data sharing is creating
the environment for this to flourish, and the growth of the Software-as-a-
Service (SaaS) model has opened up many opportunities for traditional
banks to benefit from the more customer-centric, mobile-first digital
applications that have developed on this fintech journey.

Fintech banks have disrupted the industry and the early adopters have
a new appreciation of what the combination of technology and banking
can offer them. Convenient, customer-centric banking is on the rise and
all players in the industry can benefit from this approach. What fuels that
approach is the simple but essential drive to know your customer.

22
ACXIOM THE ADOPTION OF FINTECH

HOW ACXIOM CAN HELP

Acxiom solutions can help you better connect with the

fintech consumer by helping your organisation:

Know your customer Identity resolution Access the best possible Activate your data
insights

Understanding the characteristics,
lifestyles and drivers of your
customers and prospects is
essential for any successful
marketing campaign or effective
person-level CRM strategy.
Recognising customers across
channels and devices is key
to people-based marketing.
Forty-five years of identity
resolution experience empowers
us to recognise and evaluate
customer data for a single view
of the customer.
Utillise geo-demographic data
for enhancement and analytics,
providing insight that enables
clients to better manage
audiences, personalise customer
experience across channels and
create more profitable customer
relationships.
Acxiom activates data for clients
across our network of more than
500 partners, including the largest
marketing technology platforms,
social networks, premium
publishers, and advanced TV
providers.

23
ACXIOM THE ADOPTION OF FINTECH

ABOUT ACXIOM
Acxiom enables people-based marketing everywhere through a simple, open
approach to connecting systems and data to drive better customer experiences
for people and greater ROI for business. A leader in identity, customer data
management and the ethical use of data for more than 50 years, Acxiom now
helps thousands of clients and partners around the globe work together to
create millions of better customer experiences, every day.

For more information

Visit: www.acxiom.co.uk/how-we-can-help/financial-services
Email: ukenquiries@acxiom.com

24