By Oliver Broadhurst

An increasing number of banks and insurers are focusing on their online business – and there are now many providers that operate entirely online. Fairer Finance conducted research with our independent polling partner Opinium to find out what customers really thought about these online platforms.

We received nearly 40,000 responses from Opinium’s nationally representative panel. We found that while opinions of providers’ online platforms were generally positive, there are still a large number of customers not using these platforms at all.

Home insurance was the sector least used digitally by customers, with 34% of respondents stating that they’d never used their provider’s online platform. People were most likely to go online to manage their current accounts – though one in 10 still stated they’d never used online banking. And that’s amongst people answering an online survey.

A minority of consumers still avoid doing their finances online because of fears around security of data and passwords. But others are unaware of the ease of managing their affairs online – which presents an opportunity for providers to better showcase their digital capability.

So why should more customers be moving online?

When asked to rate their provider’s online capability from ‘very good’ to ‘very poor’ on a 5-point scale, customer opinion was largely positive. For banking, 72% of responses were either ‘good’ or ‘very good’, with 12% responding neither positively nor negatively.

This number was 52% for insurance - though 28% of the remaining responses had never used their provider’s online platform, while 17% were indifferent.

Across all sectors, on average only 3% of replies were negative, ranging from 1% for bank accounts to 4% for mortgages.

Current account online platforms were the most highly regarded, with 82% of replies being positive. They were also the most highly used out of the eight sectors investigated, perhaps suggesting that people are rarely let down by their provider’s online experience.

More than just a nice experience

For banking, the benefits to customers of being able to track their finances in real time cannot be underplayed. The best digital platforms now allow customers to see clearly how they’re spending their money – and help them to budget, save and borrow more efficiently.

It’s not just digital challengers such as Monzo that are providing these benefits to customers. Large, high street banks such as Santander and HSBC now provide similar online tools to help customers track their spending.

Online Insurance

Despite insurers’ digital platforms being half as likely to be used by customers as online banking, there are increasing benefits to those who do manage their cover online.

Many insurance providers charge fees for their services, such as arrangement fees for setting up the policy, or amendment fees for making changes. However, a growing number of insurers waive these fees when customers use their online platforms.

For example, if a customer is setting up a new home insurance policy by phone, Homenet and Swinton charge an additional £15 for this service. By contrast, there’s no charge for customers arranging their policy online.

Similarly, if a customer has car insurance with More Than and wishes to change their details, they’ll be charged £25 to do this by phone. Again, this service is free online. For IGo’s home insurance, a saving of £35 can be made if changes are done online.

The Worth While Web

The digitisation of financial services is an area where customer and provider interests are clearly aligned. Good digital platforms have the ability to save consumers money, and help them manage their finances more efficiently. From a provider perspective, there is a cost saving from less call centre interactions, and an opportunity to build richer relationships with customers.

Many providers – in both banking and insurance – have been slow to invest in their technology. But with the fintech sector’s disruption gaining momentum, those who are not aiming to innovate and lead the way digitally may quickly find they lose their place in the market.