You can lead a horse to water…

You can lead a horse to water…
A story on Finextra this week caught my eye. It’s a survey carried out by YouGov on behalf of ACI Worldwide, with these headline stats. Of 2000 UK adults, the survey found that:
  • 88% have no intention of switching bank accounts within the next 12 months.
  • 82% never use mobile payment services such as PayM or PingIT during an average month,
  • 59% never use mobile banking within this same time frame.
It struck me that you can lead a horse to water, but you can’t necessarily make it drink. Or rather, becoming digital doesn’t mean your clients will be. The first bullet has been extensively discussed in previous blogs. Consumers perceive no value in swapping, with a view that banks pretty much offer the same thing. The second bullet for me, is actually surprisingly high. PingIT is not yet 4 years old and PayM not even 3 years old, making an 18% “market share” pretty impressive. It’s also for one-off payments primarily, usually P2P, and given how (relatively) few transactions of those take place each month, it’s even more impressive. The last bullet to me is the most interesting, and perhaps is a reflection of the UK market as much as anything. Given my job, I suspect it’ll come as a surprise to some that I am in that 59% – I don’t use mobile banking, and nor do I necessarily have plans to. There are a few reasons. In the UK, Direct Debit rules. 71% of household bills are paid by Direct Debit, with an average household having 7 direct debits. Therefore, the same transactions happen the same way every month at the same time. This means I have to only actively make a few payments a month, which typically fall at the same time every month. The rest of my spending is primarily on my credit card – which isn’t issued by my bank. Another theme from previous blogs is that consumers typically hold their financial products across a range of banks – as a result, the mobile banking app will never tell me my financial position. I rarely even use my card providers app either – with the alerts I’ve set up, I get a text when I near the limits I set. As a result, there is little need then to check my spending on the app. But perhaps the most simple reason is that the UK has had mobile banking for over a decade. And whilst it is good to be cutting edge, equally consumers will give up quickly on something if it doesn’t work or value from day 1. And if you’d try using WAP banking back in the day, or the app of even a few years ago, you too would be thinking there is little point. The light at the end of the tunnel hopefully is PSD2 and the XS2A (access to account) proposal. Perhaps finally a good software designer will think through the customer experience differently, will have access to all my accounts and be able to deliver something that is truly revolutionary. It will be fascinating to track what impact the PSD2 has.