NEW YORK, March 6, 2012 (GLOBE NEWSWIRE) -- 70% rate their primary bank as safeguarding their personal information "extremely well" or "very well"; among those interested in digital wallet, 74% would choose their primary bank as their preferred provider versus digital or retailer providers
While early adopters ranging from large retailers to digital brands and telecom-led consortiums are aggressively pursuing a "digital wallet" solution, retail banks still hold a significant advantage over these new players when it comes to consumer trust. Seventy percent of consumers rate their primary bank as safeguarding their personal information "extremely well" or "very well," and among those interested in using a digital wallet, 74% would prefer that their primary bank serve as the provider, compared to 23% who say PayPal and 15% who say Google. That's according to a study released today by AlixPartners LLP, the global business-advisory firm.
Meeting fast-evolving consumer expectations in mobile shopping and payments will be imperative for financial services providers looking to stay ahead of their competitors in the race for the digital wallet, says the new whitepaper -- The Mobile Shopping Revolution, How Mobile is Redefining Shopping and Payments.
"Early development efforts at the digital wallet gained little traction with consumers, as most offerings were focused primarily on the technical features of delivering payment capabilities to the point of sale, rather than addressing the shopping and purchasing needs of consumers who are increasingly turning to their mobile devices as a source of value and convenience. However, with the recent integration of shopping capabilities into the digital wallet concept, there is now a much more compelling 'use' case for consumer acceptance of the digital wallet's payments capabilities," said Bob Hedges, managing director in AlixPartners' Financial Services Practice.
"Today's consumers are not solely motivated by the idea of replacing their leather wallet with a mobile device; rather, they are interested in a digital wallet solution that can offer an integrated shopping experience. Consumer engagement is focused on the many potential value-added capabilities of a digital wallet, such as storing and managing gift cards, hosting a receipt vault, managing post-purchase warranties, organizing coupons or optimizing which payment card to use to maximize reward points," said Teresa Epperson, managing director in AlixPartners' Financial Services Practice.
Consumers' increasing use of their mobile devices for shopping is fueling interest in the digital wallet concept. According to the study, 25% of consumers with a mobile device are aware of the digital wallet concept, with the highest awareness levels among consumers between the ages of 26 and 44, where levels exceed 30%. Consumer interest in the digital wallet concept will continue to grow as mobile devices play an increasingly important role in consumers' shopping and purchase decision-making, says the study.
With consumer interest rising, a wide variety of firms have stepped forward to be potential digital wallet providers. According to the research, banks and other financial services providers are currently well-positioned to deliver a digital wallet offering, as consumers are quite discerning between banks and other providers such as digital firms and retailers when it comes to trust ratings. In the results, 70% of consumers rate their primary bank as safeguarding their personal information "extremely well" or "very well," versus just 29% saying the same for large retailers, 26% for both Google and Apple, and 15% for Facebook. Further highlighting consumers' current trust in banks, only 3% say their primary bank "does not safeguard" their personal information at all, while 26% say the same for Facebook, 15% for Apple, 14% for Google and 10% for major retailers. In regards to using their personal information, 56% of consumers believe their primary bank "always" or "mostly" uses personal information in the customer's best interest, while only 30% believe this is true for large retailers, 27% for Google, 25% for Apple and 19% for Facebook.
"Consumers are drawing a clear distinction between banks and other digital providers, and banks are scoring high as firms that consumers are comfortable sharing their confidential, personal information with," said Hedges.
More importantly, banks are right now clearly the consumer's provider of choice for the digital wallet. According to the AlixPartners survey, when consumers who expressed an interest in the digital wallet concept were asked from which type of provider they would be interested in receiving digital wallet offering, an overwhelming 74% said their primary bank, compared to 23% for PayPal and 15% for Google.
"Financial services providers must get in the digital wallet arena to both stay relevant with consumers and protect their existing customer relationships. Assuming equal feature and functionality, it seems very clear that consumers will choose a digital wallet offered by their primary bank over one offered by non-bank competitors. However, if banks do not move forward quickly to exercise leadership in this space, and instead allow competing digital technology firms to surpass them, consumers may not wait for the financial services industry to move. For banks, the strategic imperative is profound," said Epperson.
AlixPartners, through its 2011 acquisition of Mercatus LLC, has been tracking and evaluating consumer banking behavior and preferences, and more specifically, the adoption and growth of mobile financial services, since 2008. This whitepaper, The Mobile Shopping Revolution, How Mobile is Redefining Shopping and Payments, is based on the AlixPartners Mobile Financial Services Tracking Survey, formerly known as the Mercatus Mobile Financial Services Tracking Survey, has been conducted semi-annually with an online panel of U.S. consumers 18 and older. The study captures several emerging trends in how consumers use their mobile devices to manage their personal and financial lives. The research also explores consumer banking channel behaviors and preferences, as well as the decisions and criteria consumers use to choose their primary banking provider. The latest survey was conducted in mid-December 2011 to an online panel of 6,000 Americans.
AlixPartners LLP is a global business-advisory firm offering comprehensive services in four major areas: enterprise improvement, turnaround and restructuring, financial-advisory services and information-management services. Founded in 1981, the firm has more than 900 professionals in offices around the world, and can be found on the Web at www.alixpartners.com.
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