15 December 2016
Progressive Pioneers lead demand for innovation
Empowered Customers Demand Financial Innovation
Financial innovation is a notoriously difficult area to succeed in; the vast majority of new innovations fail. With a bewildering array of payment systems clamouring for attention and disruptive innovations entering the market, companies need a way of navigating this increasingly crowded landscape. And while this market doesn’t move at the speed of light, there is certainly going to be a lot of change in the next five years. For example, while cash and payment cards continue to be the staples of consumer transactions online and offline in the UK, mobile payments are expected to rise at a compound annual growth rate of almost 23% over the next five years.[i]
This evolution will be powered by the most demanding customers. Analysing decades of data, Forrester found that customers are increasingly willing to experiment, rely on technology, demand digital/physical integration, are information-savvy, and want to ensure the best personal experience — driving a sense of empowerment and digitally disruptive behaviour across every industry.
Depending on the breadth of choice, the speed of innovation in the category, and the emotional value of the product or service, customers gain empowerment in different ways and at unique rates. A deep dive into UK customer behaviours for finance shows that Progressive Pioneers, today’s most rapidly evolving consumers, are already adopting emerging financial technology.[i] In fact, Progressive Pioneers lead the demand for innovation. They experiment with and rely on technology the most, have the greatest expectations for seamless digital experiences, demonstrate the most comprehensive information consumption skills, and have a strong “go-getter” attitude.[ii] For example:
- Seventy percent of Progressive Pioneers have used PayPal in the past three months; 11% have used Visa Checkout; 8% have used Apple Pay; and 5% have used Barclays Pingit
- About half of Progressive Pioneers are interested in using a mobile digital wallet service.
- The top three companies that Progressive Pioneers trust to provide a mobile digital wallet are: A bank or credit card company, PayPal, Amazon
Trust Tops Tradition In Financial Technology Adoption
Consumers are open to using emerging technologies to organise their finances, but they don’t necessarily rely on traditional financial institutions to give them these technologies. It’s more important that the technology serves their needs, that the company is trustworthy, that money transfers are secure, and that payment processes aren’t a hassle.
Payments are emotional
A payment is simply an exchange of money between two entities: the buyer and the seller. But people have a very emotional relationship with their money — and emotions are the primary driver for how people rate their experience with a product or service. People have a hard time letting go of their money, so the goods they buy have to be worth the investment and the payment process has to make them feel good.
“It’s a really big convenience for me, as I can apply my PayPal, which gives me that added peace of mind on every purchase. Knowing that my purchase was safe and successful means a lot to me while using my mobile in this way.” (Female, 35 to 44 years old)
“[I’m] loving all the new and different ways to pay for things and like that I don’t have to mess around with purses and credit cards. So far, all payments have been easy and quick and no problems.” (Female, 35 to 44 years old)
“I think that mobile payment apps are fab. I always have my phone on me so [it] means that I do not need to worry if I ever forget my purse!” (Female, 25 to 34 years old)
Payment systems must feel secure
A payment relies on trust. Handing over cash, swiping a card, writing a cheque — for financial companies, this is just a process, but for consumers, it’s a black box. As a result, they have to feel the service provider is doing the best it can to protect their money and their data.
“What would make me more likely to use mobile payments? A guarantee that any fraudulent payment taken out of my bank account would be reimbursed by the card company!” (Female, 55 to 64 years old)
“I would be more likely to use mobile payment apps in the future if I was assured they were completely secure and [there was] no way they could be hacked so that others are able to get a hold of my details.” (Female, 25 to 34 years old)
“I am not interested in mobile payment as I do not trust it enough to use it as yet. When it has been fully tested and proved to be safe, then I may think about using it.” (Male, 65+ years old)
New technology must offer specific benefits
For most customers, the benefits of mobile payments have not yet outweighed the barriers to adoption. UK consumers are, in general, content with cash and card payments and are often wary of adopting new processes when it comes to their money.
“Why use an app when I have a perfectly good PC banking application that allows me to transfer money directly to my friends’ bank accounts for free?” (Male, 55 to 64 years old)
“If I got an incentive or was rewarded somehow for using these apps —where I’m benefiting in some way that’s relevant to me — I may then consider using it.” (Female, 25 to 34 years old)
“I've yet to understand why this is a better way than using a contactless card. I use my phone for enough things as it is and as yet feel no inclination to start using it to pay for items or services.” (Female, 35 to 44 years old)
Appendix: Methodology Section
Forrester’s Consumer Technographics European Online Benchmark Survey (Part 1), 2016, was fielded from March to May 2016. This online survey included 31,089 respondents ages 16 and older in the UK, France, Germany, Italy, Spain, Sweden, the Netherlands, Poland, and metropolitan Russia. For results based on a randomly chosen sample of this size, there is 95% confidence that the results have a statistical precision of plus or minus 0.6% of what they would be if the entire population of European online adults (defined as those online weekly or more often) had been surveyed. This confidence interval widens to 3.1% when the data is analysed at a country level.
Forrester weighted the data by age and gender to demographically represent the online adult population within each country. The survey sample size, when weighted, was 31,089. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in online panels.) Ipsos MORI fielded this survey on behalf of Forrester. Survey respondent incentives include points redeemable for gift certificates.
We also engaged UK online adults in Forrester’s ConsumerVoices Market Research Online Community (MROC). We explored consumer memories, perceptions, and interactions regarding emerging financial technologies through qualitative discussion-board-style questions and activities to elicit metaphors.
Appendix: End Notes
 Source: Forrester Research Mobile Payments Forecast, 2014 To 2019 (EU-7), 2015
 Source: Forrester's Consumer Technographics European Online Benchmark Survey (Part 1), 2016.
 Forrester defines Progressive Pioneers as consumers who experiment with and rely on technology the most, have the greatest expectations for seamless digital experiences, and demonstrate the most comprehensive information consumption skills. In 2016, 25% of US online adults are categorized as Progressive Pioneers and 9% of UK online adults. Source: Forrester's Global Consumer Technographics Online Benchmark Survey, 2016.