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Industry Spotlight > Women in Wealth

Bank Customers Favor Robo-Advice: Accenture

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Forty-six percent of North American bank customers say they’re willing to bank using computer-generated advice and services independent of a human advisor, Accenture reported Wednesday.

Accenture conducted an online poll in March of 4,013 bank customers, 2,803 of whom were based in the U.S. and 1,210 in Canada.

Seventy-nine percent of respondents welcomed robo-advice from banks to determine how to allocate investments, 74% on what type of bank account to open and 69% for retirement planning.

Half of bank customers surveyed cited speed and convenience as the main benefits of robo-advice, and 29% liked the lower costs.

Accenture reported that millennials and mass affluent consumers expressed the most interest in robo-services.

“It’s well-known that robo-advice is gaining significant traction in the wealth management industry; however, our research shows this trend is also picking up in retail banking,” David Edmondson, senior managing director of Accenture’s North America Banking practice, said in a statement.

“Consumers will continue to dictate how, when and where they want to interact, and banks have an opportunity to use intelligent automation and robotics to simplify and improve the customer experience. Successful banks will strike the right balance between human and machine interaction to elevate their role in customers’ lives beyond simple transactions and become a go-to resource.”

Nontraditional Providers

Accenture reported that consumers were increasingly willing to seek out nontraditional banks, closing the gap with those switching to large regional or national institutions.

In the past year, 11% of North American consumers — and 19% of millennials and 18% of mass affluent individuals — switched banks. Thirty-three percent of these joined a nontraditional provider, such as an online-only bank, payments providers, retailer or insurer, and 23% switched to a large regional or national bank.

Among switchers to nontraditional providers, 15% of consumers 55 and older joined an online-only bank, up from just 5% a year earlier. Twenty-seven percent of millennials moved to online-only or payments providers, up from 24% in 2015.

Consumers in the 35-to-54 age group went the other way: 24% moved to online-only or payments providers in 2016, down from 30% last year.

A quarter of U.S. consumers told researchers they would consider switching to a bank with no branch locations, up three percentage points from last year. Twenty-three percent of Canadians agreed, up eight percentage points from last year.

The biggest movement was among mass affluent customers across North America, 34% of whom would do so, up 10 percentage points from 2015.

“Consumers no longer view switching banks as a hassle, which puts pressure on firms to not only attract new customers, but find ways to keep existing customers loyal,” Edmondson said.

“According to our research, 79% of consumers consider their relationship with their bank to be purely transactional — this is a missed opportunity for banks that now have access to technology that can help them provide more tailored offerings, particularly as more consumers are open to receiving value-added services from their bank.”

Still, bank branches remain relevant. One-fourth of survey respondents said they used the branch at least weekly, and the branch was the second most preferred channel after online.

Sixty-one percent of respondents preferred full-service branches that provide extended office hours and full sales support over all other formats.

At the same time, 19% of millennials preferred “light branches,” which are highly automated with videoconferencing access to remote specialists.

The Accenture poll found that 87% of respondents were willing to use the branch in the future: 49% because they trust their bank more when they interact with another person, and 47% because they receive greater value when speaking to someone in person.

In an interesting finding, 23% of respondents said they had experienced at least one incident of their financial data having been hacked online over the past two years, yet 63% said they were willing to allow their banks to directly access personal information in order to present suitable products and services.

Accenture said respondents wanted banks to use their data to provide access to lower prices, faster service such as rapid loan approval, more relevant advice and personalized offers based on location.

— Check out Beyond 401(k)s, Merrill Boosts Offerings to Corporate Clients on ThinkAdvisor.


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