How are Financial Services Delivery Channels Changing?

How are Financial Services Delivery Channels Changing?

As Bob Dylan once sang: “the times, they are a changin”. This song-worthy statement certainly holds true in the financial services industry today. From online and mobile experiences to the internet of things, to robo-advisors and the use of artificial intelligence, things are very different today compared to a decade ago. Today, we are going to look at five graphs from the Financial Brand and see what they say about technology use in financial services.

1. Importance of Each Delivery Channel

importance of different channels

This graph examines the importance of various delivery channels to consumers.

The graph clearly shows that to consumers, the in-branch experience is the single most important delivery channel. Nearly half of consumers surveyed thought that the quality of the in-branch experience was the most important delivery channel for customer experience. In addition, nearly a quarter of respondents rank it as the second most important factor.

Notice how the smartphone app and smartphone browser experiences rank as far less important? This shows that mobile technology solutions are still far less important to the average consumer than the in-person experience, at least when it comes to banking.

Over the phone customer experience, a distinctly non-high-tech delivery channel rated very highly as second or third priority delivery channels. However, it ranked very low as a first option. This could be because if a consumer’s most used channel has a problem such as:

    • Local branch is closed for emergency
    • No internet connection is available
    • Long distance between consumer and branches
    • Laptop exploded
    • Etc.

Any of these problems could motivate a consumer to call the bank in order to solve their problem.

This means that even when you believe that digital experiences rate highly for your consumers, you will need to provide a solid in-person experience in order to satisfy their secondary and tertiary preferences.

2. Considering New Experiences

New experiences consumers are willing to try

The second graph we are looking at examines which new experiences consumers are willing to try. This graph shows that consumers are more willing to consider traditional financial service experiences. Any form of technology added to the equation will lower the adoption rate, especially among baby boomers.

Consumers are extremely willing to consider meeting in-person with a traditional financial advisor who provides personalized service for a traditional fee, across all generations. Again, this shows that consumers are very open to the idea of human interaction.

The second category, automated investment services, is less popular across all demographics. The results are the closest between this category and the previous one with millennials, who likely have the smallest amount to invest of all groups. Their relative lack of wealth, along with their digital upbringing makes them more comfortable with automated investment services.

Online financial coaching, the third option, is again dramatically less popular than meeting an advisor in person with every group except millennials. This point could tie to the one above. They do not have many assets and were raised in an environment where digital channels were emerging, making them more comfortable with those channels. Social media groups have a very little chance to be considered by any consumer, even millennials.

What I take away from this graph is the fact that consumers prefer in-person professional advice in financial services. The farther removed a service was from a professional, the less likely it would be considered.

3. Is Robo-Advice Trusted?

Is Robo-Advice Trusted?

The third graph compares whose advice is more trusted: humans or robots? While most respondents have no strong feelings one way or another, the consensus is that human advice is superior. Just over half of total respondents felt that human advisors could be trusted more than robo-advice.

Although humans are still seen as more reliable, this graph should be worrying to financial advisors who do not (or cannot) offer robo-advice. The first robo-advisor launched in 2008, so they have not even been around for a decade. By 2020, robo advisors are projected to manage over $8 trillion.

Financial advisors need to be concerned about this trend. $8 trillion is a significant amount of business to lose to automation. Financial service providers need to come together to develop a coherent strategy as to how to combat this threat. Perhaps all financial advisors will soon offer robo-advice at a rate lower than that of their standard services.

Regardless of how they combat it, a strategy must be defined soon. As the robo-advisory market matures, more and more people will be willing to adopt it. Automation is on the doorstep, how will the financial service industry respond?

4. Consumer Attitudes Towards New Technologies

Consumer attitudes towards new technology

This graph examines consumer attitudes towards new technologies, highlighting two highly sought-after groups in financial services. Now, before we get into the analysis, some factors must be accounted for. First, these are the consumers’ opinions of themselves. That might account for over half of millennials and the mass affluent claiming they are one of the first people to try out new technologies. Among these groups, being an early adopter of technology can be seen as “cool”. This wording might also contribute to the low number of respondents who claimed they are “hesitant” to try out new technology, thanks to the negative connotations often associated with that word.

Now, let’s examine what this graph tells us about attitudes towards technology adoption. It is clear, that both the mass affluent and millennials are interested in new technologies. Nearly a third of each category believe that they are the first person to try out a new technology. This points to an extreme eagerness to use new technologies. These are the consumers who will try out the latest, greatest app. They will wait in line to buy the new iPhone and they will appreciate (and use) the new features of a product.

Compared to the average person, millennials and the mass affluent will rapidly adopt new technology, they are your trendsetters. When you introduce new technology solutions, ensure that the message gets out to these groups of people.

If millennials and the mass affluent adopt a technology upon implementation and keep using the technology, it is a great sign that you have a winner on your hands. Keep this in mind when adopting a new technology for your business. Not everyone will immediately pick up new technology. Use these groups as a litmus test to gauge the success of a new technology solution

5. Adoption of New Digital Services

Adoption of new digital solutions

The final graph we will look at today examines what digital services consumers are aware of and which services are being adopted. There are two ways in which someone could view this graph:

The first way in which someone could view this is as a cynic. They would see how many people are aware of the technologies and then compare it to how many people have adopted it (or plan to). If a person looked at the graph this way, they would conclude that the financial service industry is failing at motivating the adoption of technology solutions.

The second way that someone could look at this graph would lead them to believe that the financial service industry does not consider consumer needs when introducing new technologies. Only two of the listed options have at least half of respondents planning to use the technology. These two options are arguably the most practical for financial services and could be a benefit to anybody. Digital protection against theft and fraud, as well as mobile transfer technologies, are useful to any consumer of financial services. They add convenience and safety to everybody, hence the high adoption rates. Other options listed either don’t benefit the average person, often come with significant fees, or seemingly put people’s data at risk.

Another thing that jumps off the page, is the fact that most of these options have an awareness rate below 80%, with some in the low-60% range. To me, this is the most concerning aspect of the entire graph. How can a financial institution expect to sell these solutions if people aren’t aware of them? Perhaps there is some nuance to the situation, but it appears that financial service marketers need to work on spreading awareness of new technology solutions.


These five graphs say a lot about the use of technology in the financial service industry. They show consumer banking habits through the perceived importance of various channels. The graphs show what experiences consumers would consider trying and how technology could take some percentage of business away from humans. The graphs also showed how consumers view technology, as well as to what degree consumers are aware of various financial services.

However you choose to read into these graphs, they must show to some extent how technology is moving in on traditional financial service offerings. If anything, the graphs should be a reminder to those in FinServ that the world is changing rapidly. In the future, your competition might not be a human, but a machine. Always be aware of your competitive landscape and consider what you can do to compete with automated services.

How did you read these graphs? Will robo-advisors ever truly become a threat to the traditional financial advisor? What can financial service providers do in order to retain more customers and fight back competition from financial technology? Let us know your thoughts on Twitter @VeridayHQ or on LinkedIn here!