More than half of customers will pay for a bank account if given valuable add-on services
Zuora, Inc.the leading cloud-based subscription management platform provider, has unveiled research which reveals that though loyal to their banks (24% have never changed banks; 28% changed banks over five years ago), consumers would be willing to pay – or even switch banks – in return for extra services.
According to the report, only 28% of consumers pay a fixed monthly or annual fee to their bank, yet more than half (57%) of respondents would be willing to pay an extra monthly bank fee in order to receive additional services, with media services such as Netflix and Amazon Prime (45%) beating traditional offerings such as earned cash back (40%), overdraft facilities (37%) and travel insurance (22%).
The UK-wide study of 1,000 consumers, conducted by CitizenMe with Zuora, demonstrates the rising preference for UK banks to provide ongoing access to critical and everyday services such as TV, video on demand (VOD) in place of traditional services such as insurance and overdraft facilities.
“We’re seeing the potential for a significant shift in UK banking due to the rise of the Subscription Economy®” said Zuora Managing Director for EMEA, John Phillips. “Up until this point, consumers have been historically hesitant to switch banks, mainly due to the fact that there wasn’t a noteworthy difference between one account and the other. But with the evolution of available subscription services and increasing customer demand for them, banks are in a unique position to capture the interest and long-term business of consumers – even those who have before been reluctant to make a change.”
Additional report findings include:
A majority of consumers (72%) do not currently pay a monthly fee to their bank, but for those who do pay a fee (28%), most claimed not to receive any of the listed benefits
For those who do receive extra services as a result of paying a fee, smartphone insurance (16%), travel insurance (15%) and free overdraft facilities (13%) are most commonly provided
Consumers who are willing to pay a recurring and/or fixed fee to their bank are least interested in receiving additional services like flying club miles (11%), car services (12%), and travel insurance (23%), showing a shift away from interest around traditional services
“Beginning with software over twenty years ago, then with publishing and entertainment, now transportation, retail and banking — consumers want to be given the flexibility to choose without the burden of ownership.” said Phillips. “In an era of pro-consumer regulations such as the EU PSD2 Directive and Open Banking, this is a huge opportunity for banks to evolve and move towards a new model in which they partner with their customers to provide real value and, as a result, realise new sources of revenue.”
This research echoes the overall findings from the recent report, ‘A Nation Subscribed,’ the UK-wide study conducted by YouGov with Zuora, which highlighted the increasing preference to use more subscription services two years from now and overall consumer preference for VOD (38%) and TV services (40%).