shopping for financial products in south africa
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Vertical Deep Dive FinanceSouth Africa
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Target group: Internet users in South Africa, 18 years and older
Sample: N=1,000 Internet users
Methodology:
Online Questionnaire
Representative weighting by age, gender, education, income, frequency of online access,frequency of online purchase, usage of YouTube
Period of analysis: Fieldwork: from October 21st November 4th, 2011
Final report: November 18th, 2011
Research company: TNS Infratest
Methodology - VDD Finance South Africa
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Methodology SRS Telephone Survey
Target group: General population in South Africa, 18 years and older
Sample: n=703 Internet users
Methodology:
CATI (Computer Aided Telephone Interviews)
Collection of figures about the local internet penetration
Collection of representative figures for the online population in terms of: age, gender, education,
frequency of online access, frequency of online purchase, usage of YouTube Period of fieldwork: February 15th April 28th, 2010
Research company: TNS Infratest
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Weighting of the data
Online surveys are usually conducted via online access panels.
This is a widely accepted method and TNS Germany has sound experience with online surveys inevery respect.
Weve learned that respondents in online surveys can be seen as lead users, reflecting media- andinternet usage very well.
However, respondents on panels tend to use the internet quite intensively and are usually mediainclined in general and internet inclined in particular.
Therefore we applied a weighting process based on our representative offline telephone survey inorder to minimize this effect.
Having applied the weighting procedure our survey is representative for the South African onlinepopulation aged 18+ which reflects 11% of the South African population aged 18+
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Analysis of the data
Our study reflects 11% of the South African population aged 18+ or 100% of the South Africans with
internet access aged 18+
SRS Telephone Survey VDD Finance South Africa
South Africanpopulationaged 18+
South Africanonliners aged 18+
South African onlinersaged 18+
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Relevant finance products for South Africa
The following report provides insights on the purchase and research behaviour for the following products
out of the finance vertical.
InsuranceProdu
cts
Home insurance
Life insurance
Car insurance
Travel insuranceOth
erFinancialPro
ducts
Current account/ Cheque account
Savings account
Credit card
Personal loan
Home loan/ Bond/ Mortgage
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Financial products Ownership and Purchase
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African Bank
Momentum
Barclays
Santam
Dial Direct Insurance
Virgin Money
Budget Insurance
Metropolitan
Woolworths Financial Services
Go Banking (Pick 'n Pay)
Miway Insurance
MTN Banking
RMB/Rand Merchant Bank/Origin
Mercantile Lisbon
SA Eagle
BOE/Board of Executors
Edcon Financial Services
Standard Chartered
83%
83%
83%
81%
80%
78%
77%
76%
67%
66%
64%
59%
52%
51%
48%
44%
41%
34%
FNB/First National Bank
Capitec
ABSA/Bankfin
Standard Bank/Stannic
Old Mutual
Discovery
Nedbank/Peoples Bank
Liberty Life
SA Home Loans
Sanlam
Outsurance
Hollard Insurance
Post Bank/Post OfficeWesbank
Auto & General
Investec
First for Women Insurance
FNB, Capitec and ABSA are the most recognized banks in South Africa
Awareness of financial institutions
Q6: Which of the following financial institutions, if any, are you aware of or have you ever heard of?Base (weighted): All respondents n=1,000; answer categories Other and None/Dont know not shown
95%
95%
94%
93%
92%
91%
90%
90%
88%
88%
88%
86%
85%85%
84%
84%
84%
Awareness of financial institutions
All respondents
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Ownership financial products Purchase financial products (past 12 months)
Savings account
Current account
Credit card
Life insurance
Car insurance
Home loan/Bond/Mortgage
Personal loan
Home insurance
Travel insurance
Ownership and purchase of financial products
Ownership and purchase of financial products
All respondents
62%
61%
45%
34%
30%
29%
28%
24%
1%
South African onliners own on average 4 financial products - 1 insurance and 3 other financial products
Q7: Which of the following financial products, if any, do you currently personally own, at each of these financial institutions?Q8a: And which of the following financial products, if any, have you acquired for your own personal use in the past 12 months, for each of these financialinstitutions? Base (weighted): All respondents n=1,000
33%
29%
17%
11%
13%
9%
18%
9%
1%
Savings and current accounts as well as credit cards are the most commonly owned and acquired
financial products
Overall 70% of the SouthAfrican onliners made a
purchase in the finance verticalin the past 12 months.
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FNB/First National Bank
ABSA/Bankfin
Standard Bank/Stannic
Nedbank/Peoples Bank
Old Mutual
Discovery
Sanlam
Capitec
Liberty Life
Outsurance
African Bank
Woolworths Financial Services
Momentum
Wesbank
Metropolitan
Auto & General
Hollard Insurance
Santam
SA Home Loans
Edcon Financial Services
Product holding is highest at FNB with internet users having acquired more products from FNB than from
any other bank
Ownership / purchase of financial products - Banks
41%
41%
32%
22%
21%
18%
17%
15%
15%
12%
34%
27%
19%
19%
9%
11%
7%
16%
6%
9%
11%
11%
10%
8%
8%
7%
7%
7%
6%
6%
11%
9%
4%
5%
3%
5%
4%
4%
4%
3%
products currently owned at products acquired in past 12 months
Q7: Which of the following financial products, if any, do you currently personally own, at each of these financial institutions? Q8a: And which of the followingfinancial products, if any, have you acquired for your own personal use in the past 12 months, for each of the following financial institutions?Base (weighted): All respondents n=1,000; Purchasers of financial product/s in the past 12 months n=701
Ownership and purchase of financial products
All respondents / Purchasers of financial products
10Source: Google, Vertical Deep Dive Financial : May 2012 |
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Highest cross selling potential for current and savings accounts
Repertoire of past 12 m. financial product application
Products acquiredin past 12 months
Insurances Other financial productsLife
insurance
Car
insurance
Home
insurance
Travel
insurance
Savings
account
Current
account
Credit card Home loan/
Bond
Personal
loan
in % (n=110) (n=129) (n=87) (n=7) (n=330) (n=285) (n=170) (n=88) (n=181)
Life insurance 100 28 28 58 17 21 28 45 25
Car insurance 33 100 54 63 16 20 25 32 19
Home insurance 22 36 100 97 11 16 25 37 16
Travel insurance 4 4 8 100 1 2 3 4 2
Savings account 51 40 40 61 100 32 45 36 44
Current account 53 45 52 89 27 100 60 60 49
Credit card 44 33 48 72 23 36 100 55 36
Home loan/Bond/Mortgage 36 21 38 52 9 18 28 100 18
Personal loan 41 27 34 55 24 31 38 37 100
Read: Of Internet users who acquired a current account in the past 12 months, 32% also acquired a savings account, 36% also acquired a credit card, 31% also acquired apersonal loan, etc
= highest cross-usage = second highest cross-usage !** very low incidence n
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In general South African onliners tend to acquire products at more than one bank
Financial product application Top 10
Financialinstitutions forproducts acquiredin past 12 months
FNB NedbankStandard
BankCapitec Discovery
African
BankOld Mutual Outsurance Sanlam
ABSA/Bank
fin
in % (n=240) (n=134) (n=132) (n=112) (n=79) (n=75) (n=65) (n=61) (n=51) (n=189)
FNB 100 18 20 29 25 37 35 46 32 22
Nedbank 10 100 18 27 29 19 17 31 48 15
Standard Bank 11 18 100 15 29 22 35 40 26 16
Capitec 13 22 13 100 22 33 28 11 21 15
Discovery 8 17 17 16 100 7 14 20 19 7
African Bank 12 11 13 22 7 100 20 13 22 11
Old Mutual 9 8 17 16 12 17 100 28 23 16
Outsurance 12 14 18 6 15 10 27 100 25 14
Sanlam 7 18 10 10 12 15 18 21 100 11
ABSA/Bankfin 17 21 23 25 16 29 48 44 41 100
= highest cross-usage = second highest cross-usage
Q8a: And which of the following financial products, if any, have you acquired for your own personal use in the past 12 months, for each of the followingfinancial institutions? Base (weighted): Purchasers of financial product/s in the past 12 months n=701
!* low incidence n
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Face to Face
By phone
Online
By email
Other
By post
By fax
Dont know / not sure
74%
24%
17%
7%
5%
3%
1%
7%
Online is on 3rd position as method to apply for financial products face-to-face is the most common
method
Method of application / acquiring
Q12: Now thinking about the products that you acquired or applied for in the past 12 months, how did you acquire or apply for each product?Base (weighted): Purchasers of financial products in the past 12 months n=701
Application method
Purchasers of financial products in the past 12 months
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Past 12 month application method differed, depending on the financial product - online applications
highest for credit cards and personal loans
Method of application / acquiring
Method
Insurances Other financial products
Homeinsurance
Lifeinsurance
Carinsurance
Travelinsurance
Currentaccount
Savingsaccount
Credit card Personalloan
Home loan/Bond/
Mortgage
in % (n=87) (n=110) (n=129) (n=7) (n=285) (n=330) (n=170) (n=181) (n=88)
Online 11 3 16 3 9 9 19 19 8
By phone 42 20 55 12 4 2 22 15 9
By email 2 9 9 9 3 0 3 1 18
By fax 2 22 2 0 0
By post 12 0 4 3 1 2 1
Face to Face 24 57 14 57 76 81 55 63 53
Other 7 12 2 3 2 2 0 1 8
Dont know / not sure 6 6 1 5 4 5 3 4
= most popular methodof application
= second most popular methodof application
!** very low incidence
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You are a customer of this bank, it was convenient
The price of the product/fees
The reputation of the bank/financial provider
The product features offered / benefits received
The advice of a friend/relative/spouse/acquaintance
The advice of a consultant of this bank/f inancial provider
The advice of an Independent Financial Advisor (IFA)
Other
The advice of an insurance broker
None/Dont know
45%
38%
32%
28%
27%
21%
14%
11%
11%
8%
Purchase decisions were mainly influenced by convenience, trust (customer loyalty + brand
reputation) as well as competitive prices
Factors influencing decision to apply/acquire
Q11: When you purchased these financial products, which of the following factors influenced your decision to acquire this product through this particularprovider / bank? Base (weighted): Purchasers of financial products in the past 12 months n=701
Factors influencing decision to apply/acquire - total
Purchasers of financial products in past 12 months
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Apart from Word-of-Mouth and TV the internet is an important source for creating awareness andsupporting research for financial products: 38% of the purchasers researched online prior to purchase
Source of awareness / research
Source of awareness / research
Purchasers of financial products in the past 12 months
Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product/s in the past 12 months n=701; answer categories Other and Dontknow/cant remember" not shown
I was already client - product recommended by consultant
TV
Internet
Saw the product advertised in the branch
Newspaper / Magazine
Independent Financial Advisor
Radio
Insurance broker
Billboard
45%
23%
14%
8%
7%
12%
4%
9%
4%
12%
33%
24%
26%
26%
9%
14%
7%
7%
58%
56%
38%
34%
34%
20%
18%
16%
11%
first mentioned other mentions
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TV
Internet
Newspaper / magazines
Radio
Billboard
TV ads are the most commonly cited traditional media source creating awareness online sources on
position 2 already ahead of print
Source of awareness traditional media
first mentioned other mentions
23%
14%
7%
4%
4%
33%
24%
26%
14%
7%
56%
38%
34%
18%
11%
Source of awareness / research
Purchasers of financial products in the past 12 months
Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product/s in the past 12 months n=701; answer categories Other and Dontknow/cant remember" not shown
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Client and recommended through consultants
Internet
Saw the product advertised in the branch
Independent Financial Advisor
Insurance broker
Apart from in-branch consultancy the internet plays an important role among non-traditional media for
creating awareness
Source of awareness non-traditional media
first mentioned other mentions
Source of awareness / research
Purchasers of financial products in the past 12 months
Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product/s in the past 12 months n=701; answer categories Other and Dontknow/cant remember" not shown
45%
14%
8%
12%
9%
12%
24%
26%
9%
7%
58%
38%
34%
20%
16%
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Credit Card (n=170)
Car insurance (n=129)
Personal Loan (n=181)
Current account (n=285)
Savings Account (n=330)
Home Loan / Bond / Mortgage (n=88)
Home insurance (n=87)
Travel insurance (n=7)
Life insurance (n=110)
4 out of 10 credit card purchasers of the last 12 months did first hear or research about these products
online
43%
32%
32%
26%
23%
23%
19%
11%
7%
Online as a source of awareness / research
Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product/s in the past 12 months; answer categories Other and Dont know" notshown
Online as a source of awareness / research
Purchasers of financial products in the past 12 months
!** very low incidence n
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Importance of online for creating awareness and supporting research differs per insurance product
strongest for car and home insurances
Source of awareness insurances
Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product in the past 12 months Life insurance n=110, car insurance n=129 , homeinsurance n=87, travel insurance n=7; answer category Other not shown; !** very low incidence n
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Those respondents intending to acquire a financial product are most likely to apply for car insurances,
personal loans or home loans
Future application intentions
Car insurance
Personal Loan
Home Loan / Bond / Mortgage
Life insurance
Credit Card
Home insurance
Savings Account
Travel insurance
Current account
17%
13%
13%
13%
12%
10%
9%
6%
5%
Q13a: Which of the following products, if any, do you intend to purchase/apply for in the next 12 months?Base (weighted): All respondents n=1,000; answer categories Other and None of the above not shown
Intend to purchase next 12 months
All respondents
South African onliners plan to
purchase on average 1financial product in the next 12months.
Overall 46% of the SouthAfrican onliners dont plan to
make a purchase in thefinance vertical in the next 12
months.
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3 out of 4 purchase intenders are likely to research online for their next financial products, but also 3out of 4 of those who havent done online research so far intend to do so in the future
Likelihood of researching products online
Q13b: How likely are you to research any of these financial purchases/applications online?Base (weighted): Purchase intenders n=540; Purchase intenders who researched online n=216; Purchase intenders who did not research not online n=443
23% 19% 21%
52% 58%
75% 77% 72%
17% 18% 21%
51%
6%4%
4%
15%13%13%
Very likely
Fairly likely
Fairly unlikely
Very unlikely
How likely are you to research your next financial products online?
Purchase intenders
Purchaseintenders
Researchedonline in the past
12 months
Researched notonline in the past
12 months
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1 out of 4 finance purchasers used a mobile for research purposes highest likeability for mobile research on savingsand current accounts
Mobile research prior to purchase
Yes
25%No
75%
Mobile research prior to purchase
Purchasers of financial products in past 12 months
Q10a: For which of the following financial products that you purchased / applied for in the last 12 months did you use a mobile device in order to informyourself prior to purchase? Base (weighted): Purchasers of financial products in the past 12 months n=701; answer category Other not shown
I used a mobile device (e. g. netbook,smartphone, tablet, etc.) for researchprior to purchase
Savings account
Current account
Credit card
Personal loan
Home loan/Bond/Mortgage
Car insurance
Home insurance
Life insurance
Travel insurance
9%
9%
4%
4%
2%
2%
1%
1%
0%
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Almost a quarter of those who researched for financial products via mobile devices used theirsmartphone
Devices in use for mobile research
80%
Laptop/ netbookon the go
1%
Tablet PC
24%
Smartphone
Feature/ WAP phone
5%
Q10b: And which of the following devices did you use in order to inform yourself prior to purchase?Base (weighted): Researchers via mobile devices n=178
To inform myself prior to purchase I used
Researchers via mobile devices
Other mobile phone
18%
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Unpacking online behaviour
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Websites used to research financial products
Online researchers
Search engines
Corporate websites of major banking brands
Finance portals
Blogs and consumer review sites
News websites
Price comparison sites
Other type of website
Dont know/cant remember
Search engines are by far the most popular online information source to research financial products - 7out of 10 online researchers use them
Websites used to research financial products
72%
27%
25%
10%
10%
8%
2%
1%
Q14: You said that you used the Internet to research some of the financial products that you acquired in the past twelve months. Which websites did you use toresearch these financial products? Base (weighted): Online researchers n=216
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29%39%
32%
55% 39%
85%79%
67%
4% 2%10%
36%
1%
7%
There is strong agreement that researching online is quick and easy while offering lots of valuableinformation for decision support
Evaluation online research process
Evaluation online research process
Online researchers
strongly agree
agree
You easily found theproducts / information that
you were looking for
There was a hugeamount of information
available to help you with
your decision
Researching financialproducts online was a
quick process
disagree
Q16: Could you tell me to what extent you agree or disagree with the following statements regarding the research you conducted via the Internet.Base (weighted) : Respondents who research the products online n=216
strongly disagree
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I prefer to speak toa consultant so thatyou can ask advice
I do not trust onlinesources to giveaccurate and
impartial
information
I tend to researchfinancial products
online beforeapplying offline
I visited the internetbut there were no
application offeringsonline
There is very littlefinancial information
available online
Attitude towards online research
Attitude towards online researchOnline researchers
Q17: Please could you tell me whether you agree or disagree with the following statements regarding the research you generally do for these products via theInternet? Base (weighted): Online researchers n=216
40% 31%15% 10% 6%
38%
19%
1% 0%
78%
51%
21%11% 7%
-1%
5%
25%54%
66% 70%
6%
28%33%27%17%
42%33%
7%1%
3%
strongly agree
agree
disagree
strongly disagree
Researching online prior to an offline purchase is quite common among online researchers, most of them are aware ofonline application and information offerings
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Online Banking
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Use of online bankingAll respondents
Two thirds of all respondents use online banking, almost 40% of the non-users intend to do so in thefuture
Yes 66%
No 34%18% 21% 21% 30%10%
quite likelyvery likely neither/ nor very unlikelyquite unlikely
Likelihood of online banking in futureNon-user online banking
Online banking: usage and usage intention
Q19: Do you currently use online banking for your own personal banking transactions? Q20: How likely would you be to use online banking in the next 12months? Base (weighted): All respondents n=1,000; Non-users of online banking n=336
39%
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Im afraid my money / personal information wont be safe
I am used to traditional (in-branch) banking
I just havent got round to signing up yet
I prefer to speak to the bank consultants and get advice/ information
I only have limited access to the internet
Its too complicated
Its more convenient for me to go to the bank
It involves additional costs
I have a poor internet connection, it makes online banking very slow
You cannot bank online with my banking provider
I didnt know you could bank online
I didnt know you could bank online with my financial provider
31%
29%
23%
18%
15%
12%
10%
10%
2%
2%
0%
0%
Main barriers for online banking are safety issues, traditional in-branch banking and needs for personalconsultancy
Barriers for online banking
What are your reasons for choosing not to bank online?
Non-users of online banking
No, I dont use onlinebanking.
34%
No, I dont useonline banking
Q21: What are your reasons for choosing not to bank online?Base (weighted): Non users of online banking n=336; answer categories Other and Dont know not shown
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Mobile banking
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Received transaction alerts by SMS
Received account alerts by SMS
Checked your account balance
Topped up your mobile phone credit
Transferred funds between your accounts
Checked your recent transactions
Transferred money to others
Made bill payments by accessing mobile internet
Call centre of your bank to do banking activities
Paid for transactions by accessing mobile internet
Changed your banking PIN number
Checked stock prices by accessing mobile internet
Received stock price alerts by SMS
None of the above
Banking related activities using mobile phone past 12 months
All respondents
The vast majority of the South African onliners uses mobile banking - receiving transaction or accountalerts by SMS is most popular
52%
36%
31%
25%
21%
21%
20%
16%
15%
15%
6%
2%
2%
30%
Banking related activities using mobile phone
Q22: Which of the following banking related activities have you done in the past 12 months using your mobile phone?Base (weighted): All respondents n=1,000; answer category Other not shown
70% of the South Africanonliners use mobile banking
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Receive transaction alerts by SMS n=481
Receive account alerts by SMS n=643
Check your account balance n=689
Check your recent transactions n=789
Transfer money to others n=803
Transfer funds between your accounts n=786
Pay for transactions by accessing mobile internet n=854
Make bill payments by accessing mobile internet n=837
Top up your mobile phone credit n=749
Change your banking PIN number n=944
Call centre of your bank to do banking activities n=847
Receive stock price alerts by SMS n=982
Check stock prices by accessing mobile internet n=976
39%
30%
29%
21%
24%
25%
25%
27%
19%
18%
15%
11%
10%
22%
27%
24%
32%
23%
21%
19%
18%
18%
15%
16%
11%
11%
61%
57%
54%
53%
47%
47%
44%
44%
37%
33%
31%
21%
21%
Interest in banking related activities using mobile phone
Respondents who dont use the respective activity so far
High interest in various mobile banking activities visible top three activities are receiving transactionor account alerts and checking account balances
Very interested Quite interested
Interest in banking related activities / mobile phone
Q23: How interested would you be in using the following banking-related services on a mobile phone?Base (weighted): Respondents who are interested in banking related activities not using mobile phones; answer category Other not shown
37Source: Google, Vertical Deep Dive Financial : May 2012 |
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30% of the South African Onliners use a mobile device in order to access the internet smartphonesmost popular in this respect
Internet usage on mobile device
Q10b: And which of the following devices did you use in order to inform yourself prior to purchase?Base (weighted): All respondents n=1,000
Internet usage on mobile device
All Respondents
Yes 30%No 70%
26%Smartphone
Tablet 3%
Other mobile phone 10%
Feature / WAPphone
6%
38Source: Google, Vertical Deep Dive Financial : May 2012 |
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Reading your account details on the phone
Buying air time or phone credit
Getting money out of your bank account into your phone
Receiving payments for your goods or services
Paying bills like for water, power, rates
Transferring money from your phone into your bank account
Paying for items in a shop or restaurant or bar
Paying post-paid phone bills or fixed line phone bills
Give instructions to your bank
47%
38%
21%
19%
16%
13%
10%
9%
9%
34%
25%
34%
46%
47%
43%
50%
34%
49%
20%
37%
45%
35%
37%
45%
40%
58%
42%
Almost 5 out of 10 mobile internet users read account details on the phone, 4 out of 10 buy air time orphone credit
Use of financial services via mobile internet
currently doing not interestedwould like to do
Q10c: Which of these do you currently use your phone for and which would you be happy to use your phone for, even if you are not doing it now?Base (weighted): Users of mobile devices in order to access the internet n=301
Use of financial services via mobile internet
Respondents who access the mobile internet30% of the South Africanonliners access the mobile
internet via smartphone, tabletPC, WAP / Feature phone or
other mobile phone
39Source: Google, Vertical Deep Dive Financial : May 2012 |
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Management Summary
1 The internet is a relevant channel for creating awareness, supporting research and purchasing financialproducts however, there is still some scope for growth.
2Online is among the top application methods with 17% of the past 12 month purchasers having applied
online. Credit cards and personal loans are the products most likely to have been acquired online.
However, overall offline is still the predominantly chosen application method with face-to-face and
phone applications in the lead.
3
Researching online is perceived as a convenient method for collecting pre-purchase product
information and 38% of the purchasers researched online prior to their purchase. 3 out of 4 purchase
intenders in the next 12 months are going to prepare their next purchase on the internet. Most onlineresearchers are ROPO customers: 78% agree that they usually purchase offline after having
researched online.
4Among the online information sources search engines are the top source for research on financial
products with Google being the most commonly used and best rated one.
Accordingly presence on Google enhances presence in the online research process and relevance for
the (offline) purchase.
5Both online and mobile banking are very popular and used by the majority of the South African onliners.The most popular activities are related to administration rather than to transactions, e. g. checking
account balances or receiving SMS alerts.
6 Mobile internet usage already established: 30% of the South African onliners use a mobile device foraccessing the internet - the vast majority (26%) of these use a smartphone.42S G l V ti l D Di Fi i l M 2012 |