BROOKFIELD, Wis.– Digital experiences are influencing how people manage and make decisions about borrowing and investing, according to the latest Expectations & Experiences consumer trends survey from Fiserv, Inc.
The same survey found most consumers indicated a preference to try new ways of interacting with their lender. That’s important, as among the other findings was that four of the top five loan payment methods are now electronic, and 21% of Millennial investors use a robo-advisor service to make investments.
The survey further found that smartphones are making a significant impact on lending and investment-related financial decisions, especially among millennials. Nearly half of Millennials (48%) report they would be comfortable using their smartphone to research loan options, compared to 19% of older generations.
“For most people, borrowing and investing money are careful decisions that require research, advice and trust in the provider,” said Byron Vielehr, president, Depository Institution Services, Fiserv. “Digital experiences are now an integral, and maturing, part of their consideration and management process. Importantly, these results underscore the need for providers to continually evolve and develop engaging experiences that help people make informed decisions to reach their goals, whether it’s borrowing for the perfect home or investing for retirement.”
Among the other findings:
- Human interactions remain an important part of financial advice, especially for the 34% of consumers with at least $100,000 in household investable assets. Fifty-eight percent of these affluent consumers work with a financial advisor. Among those without an advisor, only 11% report high interest (8-10 on a scale of 0-10) in using one. At the same time, 32% of affluent consumers who invest their own money grade their knowledge and expertise as a “C” or lower, suggesting an opportunity to bridge the gap with a hybrid of human and digital advice.
- Among all consumers who invest on their own, just 8% use a robo-advisor service. However, use of such a service is much more likely among Millennials (21%) and urban consumers (18%).
- While most consumers are comfortable researching and completing loan activities online, the key factors for choice of a lender relate to cost and consumer experience. Topping the list of selection factors among those with at least one loan are interest rates (83%) and low fees/service charges (83%), followed by customer service (75%), company reputation (70%), and knowledge of staff (65%). Sixty-five percent of consumers say prior experience with a lender is important.
- Many consumers expressed willingness to try new ways of interacting with their lender, if there’s a benefit. For instance, if it makes the loan process faster, more than half of consumers would be willing to use a mobile device to e-sign loan documents (56%), take and upload photos of loan documents (54%), and verify their identity with a photo (51%). Forty-two percent of consumers indicate they would be willing to provide access to their financial information by providing their credentials to other online banking applications, up from 32% in 2016.
- Digital channels, especially mobile, are now leading ways of communicating with a lender, although context matters based on the interaction. The Fiserv survey found a lender’s mobile app is the preferred way to check when a next loan payment is due (21%), check the balance term (20%) and request a payoff (17%), among consumers who have conducted each of these activities in the past six months. For account questions, consumers significantly favor speaking live with a representative via phone (21%) over using an automated voice response system (12%), e-chat (11%) or the mobile app (11%).