Aggregation Metrics: Consumer Attitudes towards Online Aggregation and Broking of Financial Services in Spain

Finaccord’s report titled Aggregation Metrics: Consumer Attitudes towards Online Aggregation and Broking of Financial Services in Spain offers detailed and unique insights into the behaviour of Spanish consumers in the context of financial services distribution with a particular focus on the prospects for online aggregation and broking. Based on a primary survey of over 1,000 consumers in Spain carried out between July and August 2008, the research provides robust and valuable data describing the way in which consumers’ use of distribution interfaces and channels is changing when they acquire financial services. In addition to investigating the extent to which consumers in Spain acquire banking or insurance products via the Internet at all, the research also analyses the degree to which they compare product prices and characteristics prior to buying and the number of websites they typically visit for this purpose. Moreover, for each of mortgages, personal loans, motor insurance and household insurance, it provides annual churn data and detailed distribution interface and channel analyses to illustrate the future potential of both on-line aggregation and broking, and alternative distribution systems.

Furthermore, the report measures the consumer recognition rates achieved by leading online aggregators and brokers in Spain, and how these compare to the online brands of major direct providers, and also considers the extent to which consumers in Spain are aware of and / or value the fundamental concepts of online aggregation and broking. Key features of the report include: insight into the propensity of Spanish consumers to buy goods and services online, including segmentation of customers for online financial services; analysis of how consumers in Spain use the Internet for financial services including how they use it for research as well as for buying online, how many websites they visit before taking out banking or insurance products, and whether their choice of website is influenced by its status as the online shop window of a bank or insurance company (ie. the ultimate provider), an aggregator or a broker; brand recognition of 20 financial websites in Spain including those of the leading direct providers of banking and insurance products as well as those of the most prominent aggregators and / or brokers; benchmarks for the distribution of four key products in Spain (mortgages, personal loans, motor insurance and household insurance), measuring the segmentation of sales by distribution channel and by interface, and how this is changing over time; overall summary of the apparent attractiveness of markets for online aggregation and broking, comparing sales by brokers against sales via the Internet and their rates of change in Spain.

0.0 EXECUTIVE SUMMARY
Spanish consumers are willing to buy financial services online, especially banking…
… though the way that the Internet is used varies significantly by gender
Nearly a third of consumers search seven or more websites when buying insurance
Internet sales are growing rapidly for motor insurance only
Usage of distribution channels is changing less quickly than that of distribution interfaces
Switchers outnumber new customers for mortgages and insurance
Direct providers’ websites have much higher recognition rates than brokers, with two exceptions
Consumers do not understand differences between aggregators, brokers and direct providers…
… but consumer education could transform online behaviour

1.0 INTRODUCTION
Finaccord
European consumer research
Aggregation
European market, partnership and bancassurance research
Research rationale
Online aggregation is having a major impact on financial services distribution
Interest in online aggregation is not limited to traditional providers of consumer financial services
The growth and influence of Confused.com and Moneysupermarket.com are beyond dispute…
… although the UK now endures a surplus of competitors in online aggregation and broking
Heavy spending on advertising has helped the industry leaders to stay ahead of the pack
The Aggregation Metrics research has been structured to test the appetite of consumers in Europe

2.0 SURVEY ANALYSIS
Introduction
Consumer propensity to purchase via the Internet
Nearly three-quarters of consumers in Spain have bought airline or travel tickets online…
…and nearly half have bought banking products via the Internet
There is wide potential for online marketing and partnership programmes
Propensity to research and take out financial products over the Internet
Banking products
Two thirds of consumers use the Internet to research and / or take out banking products
Men are much more likely to buy online than women, who use it as a research tool primarily
Insurance products
Consumers use the Internet to research insurance as much as for banking, but buy less online
Use of the Internet both to research and acquire insurance varies among consumer groups
Comparison with European average
Number of websites visited prior to taking out financial products online
Banking products
Online customers are most likely to solicit details for banking products on three occasions…
Insurance products
… but use seven or more sites for insurance
Mortgages
Switching rates and brand new loans
Analysis of distribution interfaces used
Mortgage distribution sees a slow shift from face-to-face sales towards Internet and telephone……
Analysis of distribution channels used
… although direct distribution by the mortgage lenders themselves remains dominant
Personal loans
Switching rates and brand new loans
Analysis of distribution interfaces used
Face-to-face transactions are moving to the telephone rather than the Internet…
Analysis of distribution channels used
… with direct lenders slightly increasing their market share
Comparison of distribution channels used by offline and online customers
Loan brokers are stronger than direct lenders amongst online customers
Motor insurance
Switching rates and brand new sales
Analysis of distribution interfaces used
There has been a clear migration from face-to-face transactions to the Internet
Analysis of distribution channels used
… although the share of the various distribution channels themselves has changed little
Comparison of distribution channels used by offline and online customers
Direct insurers are prospering among online buyers than intermediary channels
Household insurance
Switching rates and brand new sales
Analysis of distribution interfaces used
Telephone sales rise faster than online sales
Analysis of distribution channels used
… but distribution channel dynamics for household insurance remain virtually unchanged
Summary of market attractiveness for online aggregators and brokers
A lack of tradition for the use of brokers by consumers for financial services clouds the outlook
Switching increases the market available for aggregators and brokers
Switchers outnumber new customers for all products except personal loans
Online aggregators and brokers of financial services
Recognition rates
Few online aggregators or brokers achieve consumer recognition rates in excess of 20%
Consumer understanding of aggregation and broking concepts
Brokers of financial services
Spanish consumers are comparatively unlikely to appreciate the basic definition of brokers……
Aggregators of financial services
… and knowledge of aggregators is limited by their effective absence from the Spanish market

3.0 APPENDIX
Research sample
The research embraces a total of 1,004 respondents in Spain
Research questionnaire

Graphs/Tables

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