NEW YORK, Nov. 5, 2014 (GLOBE NEWSWIRE) -- Money2020, the leading global event for innovations in money, kicked off in Las Vegas this week and Teresa Epperson, a managing director in the Financial Services Practice at AlixPartners, was among the first to share new consumer research on digital financial services.
At the conference, Epperson also announced the launch of the AlixPartners Digital Orientation (DO) Index, a proprietary tool developed to evaluate consumers' level of comfort and engagement with technology. The DO Index uses behavioral attributes from AlixPartners' Franchise Health Consumer Research Program, which has been executed semi-annually since 2008.
The DO Index creates a digital customer profile based on several digital-usage variables, including mobile device ownership, general digital engagement, digital commerce engagement and digital financial services engagement and assigns an individual Digital Orientation Score to a customer or set of customers through AlixPartners' proprietary digital orientation propensity model. Financial services providers can employ the DO Index to understand how likely a customer is to adopt lower-cost digital channels over the more traditional physical channels so they can invest in relevant, targeted marketing programs. The DO Index is refreshed every six months, enabling a provider to keep track of the changing pace of digital adoption across its customer base.
"We have witnessed a clear shift in digital orientation scores over the past few years as the overall population becomes more digitally engaged. While the millennials still lead the charge, the 55–and-older age group is also exhibiting increasing digital orientation," said Epperson.
According to the study, the financial services marketplace is being fundamentally transformed by the introduction of mobile and digital services, which are having game-changing impacts on how consumers manage their finances.
It's not surprising, the study says, that the so-called "digital natives," young people aged 18 to 34, are taking up an ever-wider range of financial services on their smart phones and tablets, but the trend is accelerating, as new services such as mobile remote deposit capture (RDC), the ability to deposit paper checks using a smart phone, quickly become mainstream. Among respondents in this age group, who use mobile banking, more than half (51%) have adopted mobile RDC. The survey also showed that older consumers are embracing digital capabilities as well, with 36% of mobile bankers 55 and above adopting mobile RDC, a reflection, says the study, of both the ease and convenience of mobile RDC, as well as their growing comfort with mobile/digital capabilities.
"Utilizing the DO Index we can see that opportunities exist to improve the adoption of mobile banking as well as adoption and usage of more advanced mobile capabilities within a bank's customer base. We see approximately 20% of the banked population that has very high DO scores but have yet to adopt mobile banking with their primary bank. Understanding who these customers are and targeting them with the relevant messaging will be critical to improving mobile banking adoption metrics," said Epperson.
According to Epperson, the AlixPartners Digital Orientation Index can help financial services providers improve the adoption and utilization of digital capabilities in several ways:
- Identify customers who are not only ready and willing to adopt digital technology and services but are expecting and demanding the "next new thing"
- Identify customers who do not currently use digital financial services, but may be "digital" outside of their financial services lives, and may be are primed for adoption
- Measure and track the pace of adoption of digital services across a customer base over time, and how that pace shifts and changes
- Target marketing dollars to reach those customers on the cusp of adoption, while steering clear of marketing digital concepts to customers who might never adopt
Digital orientation varies by age, income and geography, among other factors, and it is dynamic and evolving, according to the study. Understanding where customers are today on the digital orientation spectrum will become increasingly important as bank's seek to improve adoption rates and usage of digital services and capabilities.
About the Study
The AlixPartners Mobile Financial Services Tracking Study comes from a consumer survey conducted by AlixPartners at the end of the second quarter of 2014, and is the latest edition in AlixPartners' semi-annual Franchise Health Survey. The overall survey has been conducted in the second and fourth quarters annually since 2008, and the most recent one includes an online panel of nationally representative samples of 5,006 U.S. "banked" consumers of at least 18 years of age.
AlixPartners is a leading global business-advisory firm of results-oriented professionals who specialize in creating value and restoring performance at every stage of the business lifecycle. We thrive on our ability to make a difference in high-impact situations and deliver sustainable, bottom-line results. The firm's expertise covers a wide range of businesses and industries whether they are healthy, challenged or distressed. Since 1981, we have taken a unique, small-team, action-oriented approach to helping corporate boards and management, law firms, investment banks and investors respond to critical business issues. For more information, visit www.alixpartners.com/en/industries/financialservices.aspx.
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