Due to COVID-19, consumers of financial services are shifting towards digital payments, digital channel adoption, interest in savings and safer investments.
Capgemini Research Institute’s study ‘COVID-19 and the financial services consumer’ analyses how the crisis changed consumer behaviour in the financial sector. Findings suggest that the pandemic has hastened the shift towards digital payments, increased digital channel adoption, spurred consumer interest in savings and safer investments. It is driving customer loyalty towards those organizations that are handling this crisis well.
Shift towards digital payments in India is particularly striking considering how consumer behaviour is evolving among segments – such as older consumers – that have traditionally preferred cash for transactions.
The study is based on inputs from over 11,200 consumers sourced in early April 2020 from 11 countries including India, USA, UK and China. Eighty per cent of the older consumers in India between the age group of 56-60 years show the highest usage of digital payment channels in the next 6 months. This was followed by the age group of 36-45 years at 83%. The global average for increase in digital payment channels in next 6 months between the age group of 56-60 years and 36-45 years stood at 43 % and 48% respectively.
•Digital payments: COVID-19 has accelerated the shift from cash to digital payments and this trend will persist in the future.
•Channel usage: Digital channel adoption will increase, but physical touchpoints will continue to play a role post-COVID.
•Investment preferences: Consumers are veering towards savings and safer investments, including insurance. Close to two-thirds (63%) of consumers say they will be focused on boosting savings over the next six to nine months.
•Consumer loyalty: The way FS organizations handle the crisis will influence consumer loyalty. Over a third (36%) of consumers have found a new provider during this crisis and they will stick with this provider in the future. Digital disruptors are the destination for many of these consumers.
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