Net Metrics: Consumer Researching and Purchasing Trends in UK Internet Banking

Publication Date	March 2007
Publisher	Finaccord
Product Type	Report
Pages	150
ISBN Number	not applicable
Product Code	FIN00150

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Summary

The report titled Net Metrics

Consumer Researching and Purchasing Trends in UK Internet Banking focuses on two fundamental aspects of Internet distribution of lending and savings products in the UK: patterns in consumer behaviour and dynamics in the market for web-based brokers and aggregators of banking products, including the impact of on-line providers of general price comparison services. With regards to the former issue, the research investigates several core areas including consumer propensity to take out six different types of banking product via the Internet, consumer propensity to use different types of web site in this context and the relative importance of nine key characteristics of web sites promoting lending and savings products for encouraging consumer usage to research and / or acquire. As for the latter, the study offers an expanded and detailed benchmarking in terms of consumer awareness, consumer trust and consumer usage to take out banking products of 70 of the leading web-based aggregators and brokers in the UK including AWD Moneyextra, e-loan, Elephant Loans, Freedom Finance, MoneyExpert, Moneynet, Moneysupermarket.com and The Motley Fool. Moreover, it also offers an evaluation of the impact in this market of 25 prominent on-line providers of general price comparison services including Ciao!, Kelkoo and uSwitch.

The report can be used in one or more of the following ways:

understand the progress being made by 'traditional' brokers, such as Ocean Finance, well-established on-line specialists, such as Moneysupermarket.com, and protagonists with clearly differentiated operating models, such as MoneySavingExpert, The Motley Fool and Zopa;
appreciate whether the market for on-line aggregation and broking of lending and savings products is subject to consolidation and what this means for the full universe of participants in this sector;
evaluate the potential for distributing banking products through different types of web site and how consumer propensity to use 'indirect' channels compares with the likelihood to use the web sites of the banks, building societies and other lending institutions themselves;
gain insight into the apparent effectiveness of new marketing channels, such as e-mail and SMS text advertising, in comparison to tried and tested media, such as radio and television;
acknowledge the degree to which new sources of information, such as on-line communities, discussion boards and weblogs, are being used by consumers prior to taking out banking products. The research for this study was carried out during January and February 2007 using the Internet consumer panel of IMRS. In total, completed surveys were filled in and submitted on-line by 1,540 consumers breaking down by age group, household income band and geographical location as illustrated in the report prospectus. In addition, for questions that overlap with the sister Net Metrics research and publication covering Internet insurance, responses were received from a further 1,560 consumers making 3,100 in total.

Content

0.0 Executive Summary
1.0 Introduction
- Research rationale
- The Internet banking market has continued to develop rapidly during the last 12 months with a number of new competitors having emerged in the aggregation and broking space
- Research sample
- Research structure
- Research enhancements
- Web-based aggregators and brokers of lending products
- On-line aggregators and brokers of banking products can use a variety of operating models with Zopa, the 'social lending' marketplace, standing out as a unique example in this respect
- Who owns whom in web-based aggregation / broking of banking products?
- Finaccord
- Net Metrics and other consumer-focused studies
- UK affinity and partnership marketing publications
- IPT / IMRS
2.0 Market Analysis
- Introduction
- Consumer propensity to purchase via the Internet
- Consumers are most likely to have made on-line acquisitions of books or music with almost 50% having taken out banking products via the Internet at least once in the past
- Significant year-on-year growth appears to have occurred for cars, clothing and groceries although it is possible that the number of on-line insurance buyers has hit a temporary peak
- Propensity to research and purchase insurance products over the Internet
- Most consumers who research banking products via the Internet also take them out on-line
- Types of web site used for researching and taking out banking products
- Opportunities arising from growth in Internet sales are not limited to banks and building socs.
- Consumers show high willingness to use the web sites of on-line price comparison providers although there appears to be less interest in using the web sites of trad. affinity partners
- Breakdown by type of banking product
- Consumers are most likely to take out credit cards and savings deposits via the Internet
- On-line sales are least likely to be realised among customers for mortgages and car finance
- For most products, on-line customers are most likely to use the site of a focused bank. entity. although on-line sales of banking products are often intermediated in one form or another
- Effectiveness of on-line and off-line marketing prompts
- In spite of competition from other media, television advertising appears to be the most effective
- Few consumers are likely to be influenced by SMS text advertising or on-line pop-up advertising
- The effectiveness of event sponsorship as a marketing prompt appears to be increasing
- Other sources of information and advice used
- Consumers are very likely to consult friends or family prior to taking out banking product although a variety of other sources are also used by a significant percentage of respondents
- Fewer than 10% of on-line banking customers pay any attention to comments on 'blogs'
- Number of details solicited prior taking out bank. prods. over the Internet
- On-line customers are most likely to solicit details for banking products on three occasions
- Recognition and usage of providers of general price comparison services
- A number of general price comparison providers have begun coverage of banking products although the nature of this aspect of their service varies significantly from entity to entity
- Eight general providers of price comparisons are recognised by over one third of respondents with MoneySavingExpert.com achieving the highest search rates for banking products
- Characteristics of effective web sites for banking products
- Almost 75% of consumers consider the degree to which they trust a site to be very important
- Over a quarter of respondents are comfortable with using a site with no telephone support
3.0 Competitor Analysis
- Introduction
- Consumer awareness of aggregation and broking web sites
- Ocean Finance and Norton Finance continue to rank among the leading five brokers although consumer recognition of a trio of fleeter-footed rivals is growing far more quickly
- Awareness of Elephant Loans and Freedom Finance has diminish. during the most recent year
- Well over half of the 70 web brands covered are not recognised by over 85% of respondents
- Consumer trust of aggregation and broking web sites
- Nine aggregators and brokers of banking products are clearly ahead of the bulk of their peer although only six in total would definitely be trusted by more than 5% of respondents
- Consumer usage of aggregation and broking web sites
- Moneysupermarket.com, The Motley Fool and MoneyExpert are clear market leaders
- 0.21% of respondents claim to have made use of Zopa, the lending and borrowing exchange
- The vast majority of competitors lack the differentiating features to improve their prospects
- The Motley Idol, Moneysupermarket.com and MoneyExpert have broken away from the pack as a consequence of the breadth and differentiated nature of their proposition
- Moneysupermarket.com and MoneyExpert appear to have grown most rapidly
- Conditions for market participants outside of the top ten seem destined to become tougher as the evidence of the research is that the majority of the leading players are gaining ground
4.0 Aggregator And Broker Profiles
- Introduction
- 4.1 1st choice loans (www.1st-choice-loans.co.uk)
- 4.2 24 Hour loan (www.24hour-loan.co.uk)
- 4.3 77 Finance (www.77finance.co.uk)
- 4.4 accepted.co.uk (www.accepted.co.uk)
- 4.5 AdviceOnline (www.adviceonline.co.uk)
- 4.6 apply4aloan.co.uk (www.apply4aloanonline.co.uk)
- 4.7 Arrange it Free (www.arrangeitfree.com)
- 4.8 AWD Moneyextra (www.moneyextra.com)
- 4.9 Beech Finance (www.beechfinance.co.uk)
- 4.10 blackandwhite.co.uk (www.blackandwhite.co.uk)
- 4.11 Blue Moon (www.bluemoon.co.uk)
- 4.12 Charcolonline (www.charcolonline.co.uk)
- 4.13 Click 4 A Loan (www.click4aloan.co.uk)
- 4.14 Compare Loan UK (www.compareloan.co.uk)
- 4.15 Creditcards.co.uk (www.creditcards.co.uk)
- 4.16 earth mortgages (www.earthmortgages.co.uk)
- 4.17 Easy Loans (www.easy-loans.co.uk)
- 4.18 Easy Quote (www.easy-quote.co.uk)
- 4.19 Elephant Loans (www.elephantloans.co.uk)
- 4.20 e-loan (www.e-loan.co.uk)
- 4.21 E-loanshop.com (www.e-loanshop.com)
- 4.22 emortgage.co.uk (www.emortgage.co.uk)
- 4.23 Enable Finance (www.enablefinance.com)
- 4.24 Endsleigh Financial (www.endsleigh-financial.co.uk)
- 4.25 Fair Investment Company (www.fairinvestment.co.uk)
- 4.26 Financeworx (www.financeworx.co.uk)
- 4.27 First Line Loans (www.firstlineloans.co.uk)
- 4.28 Flexemortgage (www.flexemortgage.co.uk)
- 4.29 Freedom Finance (www.freedomfinance.co.uk)
- 4.30 Goodinvestor.com (www.goodinvestor.com)
- 4.31 Guardian Credit (www.guardiancredit.co.uk)
- 4.32 Home Loans Direct (www.homeloansdirect.net)
- 4.33 Home Loans Made Easy (www.homeloansmadeeasy.net)
- 4.34 Interactive Investor (www.III.co.uk)
- 4.35 LendQuest (www.lend-quest.co.uk)
- 4.36 Loan Giant (www.loangiant.co.uk)
- 4.37 loan.co.uk (www.loan.co.uk)
- 4.38 LoanCube (www.loancube.co.uk)
- 4.39 Loans UK (www.loansuk.co.uk)
- 4.40 Loanspage.co.uk (www.loanspage.co.uk)
- 4.41 mform (www.mform.co.uk)
- 4.42 MoneyExpert (www.moneyexpert.com)
- 4.43 Moneynet (www.moneynet.co.uk)
- 4.44 Moneyquest (www.moneyquest.co.uk)
- 4.45 Moneysupermarket.com (www.moneysupermarket.com)
- 4.46 Moneyworld (www.moneyworld.com)
- 4.47 Mortgages.co.uk (www.mortgages.co.uk)
- 4.48 mysortofloan (www.mysortofloan.co.uk)
- 4.49 NetLoans (www.netloans.co.uk)
- 4.50 NetYourDebt (www.netyourdebt.com)
- 4.51 Norton Finance (www.nortonfinance.com)
- 4.52 Ocean Finance (www.oceanfinance.co.uk)
- 4.53 Okoza (www.okoza.co.uk)
- 4.54 Only Finance (www.onlyfinance.com)
- 4.55 Pacific Home Loans (www.pacifichomeloans.co.uk)
- 4.56 Pay day UK (www.paydayuk.co.uk)
- 4.57 Personal-loans.co.uk (www.personal-loans.co.uk)
- 4.58 Purely Mortgages (www.purely.co.uk)
- 4.59 Shakespeare Finance (www.shakespearefinance.co.uk)
- 4.60 Star Finance (www.starfinance.co.uk)
- 4.61 The Home Loan Shop (www.thehomeloanshop.co.uk)
- 4.62 The Mortgage & Loan Business (www.mortloan.co.uk)
- 4.63 The Motley Fool (www.fool.co.uk)
- 4.64 The Thrifty Scot (www.thriftyscot.co.uk)
- 4.65 theidol.com (www.theidol.com)
- 4.66 UK Personal Loan Store (www.ukpersonalloanstore.co.uk)
- 4.67 Unravelit (www.unravelit.com)
- 4.68 Vesta Money (www.vestamoney.co.uk)
- 4.69 yes-loans.co.uk (www.yes-loans.co.uk)
- 4.70 Zopa (www.zopa.com)
Graphics / Tables
- Sample breakdown by age group, household income band and geographical location - banking questions
- Sample breakdown by age group, household income band and geographical location - entire survey
- Aggregators and brokers of banking products covered for the first time in the Q1 2007 research
- Who owns whom in web-based aggregation and broking of banking products in the UK?
- Who owns whom in web-based aggregation and broking of banking products in the UK? (continued)
- Who owns whom in on-line provision of general price comparisons in the UK?
- Consumer propensity to purchase assorted goods and services via the Internet, Q1 2007
- Cons. prop. to purchase assorted goods and services via the Internet, Q1 2006 and Q1 2007 comp. (data)
- Consumer prop. to research and take out banking products over the Internet, Q1 2006 and Q1 2007 comp.
- Types of site used for res. and tak. bank. prods.., inc. sites of orgs. for which dist. of ins. is a sec. act., Q1 2007
- Tps. of site used for res. and tak. bank. prods. inc. sites of orgs. for wh. dist. of ins. is a sec. act., Q1 2007 (data)
- Use of on-line and off-line channels for taking out assorted banking products, Q1 2007
- Use of on-line and off-line channels for taking out assorted banking products, Q1 2007 (data)
- Breakdown of on-line channels by type of web site used for purchasing assorted banking products, Q1 2007
- Breakdown of on-line channels by type of web site used for purchasing assorted bank. prods., Q1 2007 (data)
- Effect. of on-line and off-line mktg. prompts as a means of persuading custs. to visit part. web sites, Q1 2007
- Effect. of mktg. prompts as a means of pers. custs. to visit part. web sites, Q1 2006 and Q1 2007 comp. (data)
- Other sources of information and advice used prior to taking out banking products, Q1 2007
- Other sources of information and advice used prior to taking out banking products, Q1 2007 (data)
- Number of quotes sol. by cons. prior to taking out bank. prods. over the Internet, Q1 2006 and Q1 2007 comp.
- No. of quotes solicited by cons. prior to tak. bank. prods. over the Internet, Q1 2006 and Q1 2007 comp. (data)
- Recognition and usage of on-line providers of general price comparison services, Q1 2007
- Recognition and usage of on-line providers of general price comparison services, Q1 2007 (data)
- Imp. of web site characts. in pers. custs. to res. and / or purch. bank. prods. through a part. web site, Q1 2007
- Imp. of site characts. in pers. custs. to res. and / or purch. bank. prods. through a part. web site, Q1 2007 (data)
- Ranking of web sites of aggregators and brokers of bank. products by overall consumer awareness, Q1 2007
- Ranking of web sites of aggs. and brokers of bank. prods. by overall consumer awareness, Q1 2007 (cont.)
- Ranking of web sites of aggregators and brokers of banking products by consumer trust, Q1 2007
- Ranking of web sites of aggregators and brokers of banking products by consumer trust, Q1 2007 (continued)
- Ranking of web sites of aggregators and brokers of bank. products by consumer usage to purchase, Q1 2007
- Ranking of web sites of aggs. and brokers of bank. prods. by consumer usage to purchase, Q1 2007 (cont.)
- Correlation between cons. awareness and consumer trust of web sites of aggs. and brokers of bank. prods.
- Correlation between cons. aware. and cons. usage to take out of web sites of aggs. and brokers of bank. prods.
- Correlation between cons. trust and cons. usage to take out of web sites of aggs. and brokers of bank. prods.
- Comparison of recent and historic usage to take out of web sites of aggs. and brokers of banking products (1)
- Comparison of recent and historic usage to take out of web sites of aggs. and brokers of banking products (2)
- Consumer usage, trust and usage to take out banking products of the www.1st-choice-loans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.24hour-loan.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.77finance.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.accepted.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.adviceonline.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.apply4aloanonline.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.arrangeitfree.com web site
- Consumer usage, trust and usage to take out banking products of the www.moneyextra.com web site
- Consumer usage, trust and usage to take out banking products of the www.beechfinance.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.blackandwhite.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.bluemoon.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.charcolonline.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.click4aloan.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.compareloan.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.creditcards.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.earthmortgages.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.easy-loans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.easy-quote.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.elephantloans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.e-loan.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.e-loanshop.com web site
- Consumer usage, trust and usage to take out banking products of the www.emortgage.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.enablefinance.com web site
- Consumer usage, trust and usage to take out banking products of the www.endsleigh-financial.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.fairinvestment.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.financeworx.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.firstlineloans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.flexemortgage.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.freedomfinance.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.goodinvestor.com web site
- Consumer usage, trust and usage to take out banking products of the www.guardiancredit.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.homeloansdirect.net web site
- Consumer usage, trust and usage to take out bank. products of the www.homeloansmadeeasy.net web site
- Consumer usage, trust and usage to take out banking products of the www.III.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.lend-quest.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.loangiant.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.loan.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.loancube.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.loansuk.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.loanspage.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.mform.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.moneyexpert.com web site
- Consumer usage, trust and usage to take out banking products of the www.moneynet.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.moneyquest.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.moneysupermarket.com web site
- Consumer usage, trust and usage to take out banking products of the www.moneyworld.com web site
- Consumer usage, trust and usage to take out banking products of the www.mortgages.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.mysortofloan.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.netloans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.netyourdebt.com web site
- Consumer usage, trust and usage to take out banking products of the www.nortonfinance.com web site
- Consumer usage, trust and usage to take out banking products of the www.oceanfinance.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.okoza.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.onlyfinance.com web site
- Consumer usage, trust and usage to take out banking products of the www.pacifichomeloans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.paydayuk.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.personal-loans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.purely.co.uk web site
- Consumer usage, trust and usage to take out bank. products of the www.shakespearefinance.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.starfinance.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.thehomeloanshop.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.mortloan.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.fool.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.thriftyscot.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.theidol.com web site
- Consumer usage, trust and usage to take out bank. products of the www.ukpersonalloanstore.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.unravelit.com web site
- Consumer usage, trust and usage to take out banking products of the www.vestamoney.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.yes-loans.co.uk web site
- Consumer usage, trust and usage to take out banking products of the www.zopa.com web site