shopping for financial products in south africa

7/27/2019 Shopping for Financial Products in South Africa

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Vertical Deep Dive FinanceSouth Africa


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Target group: Internet users in South Africa, 18 years and older

Sample: N=1,000 Internet users

Methodology:

Online Questionnaire

Representative weighting by age, gender, education, income, frequency of online access,frequency of online purchase, usage of YouTube

Period of analysis: Fieldwork: from October 21st November 4th, 2011

Final report: November 18th, 2011

Research company: TNS Infratest

Methodology - VDD Finance South Africa

2Source: Google, Vertical Deep Dive Financial : May 2012 |


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Methodology SRS Telephone Survey

Target group: General population in South Africa, 18 years and older

Sample: n=703 Internet users

Methodology:

CATI (Computer Aided Telephone Interviews)

Collection of figures about the local internet penetration

Collection of representative figures for the online population in terms of: age, gender, education,

frequency of online access, frequency of online purchase, usage of YouTube Period of fieldwork: February 15th April 28th, 2010

Research company: TNS Infratest



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Weighting of the data

Online surveys are usually conducted via online access panels.

This is a widely accepted method and TNS Germany has sound experience with online surveys inevery respect.

Weve learned that respondents in online surveys can be seen as lead users, reflecting media- andinternet usage very well.

However, respondents on panels tend to use the internet quite intensively and are usually mediainclined in general and internet inclined in particular.

Therefore we applied a weighting process based on our representative offline telephone survey inorder to minimize this effect.

Having applied the weighting procedure our survey is representative for the South African onlinepopulation aged 18+ which reflects 11% of the South African population aged 18+



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Analysis of the data

Our study reflects 11% of the South African population aged 18+ or 100% of the South Africans with

internet access aged 18+

SRS Telephone Survey VDD Finance South Africa

South Africanpopulationaged 18+

South Africanonliners aged 18+

South African onlinersaged 18+



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Relevant finance products for South Africa

The following report provides insights on the purchase and research behaviour for the following products

out of the finance vertical.

InsuranceProdu

cts

Home insurance

Life insurance

Car insurance

Travel insuranceOth

erFinancialPro

ducts

Current account/ Cheque account

Savings account

Credit card

Personal loan

Home loan/ Bond/ Mortgage



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Financial products Ownership and Purchase


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African Bank

Momentum

Barclays

Santam

Dial Direct Insurance

Virgin Money

Budget Insurance

Metropolitan

Woolworths Financial Services

Go Banking (Pick 'n Pay)

Miway Insurance

MTN Banking

RMB/Rand Merchant Bank/Origin

Mercantile Lisbon

SA Eagle

BOE/Board of Executors

Edcon Financial Services

Standard Chartered

83%

83%

83%

81%

80%

78%

77%

76%

67%

66%

64%

59%

52%

51%

48%

44%

41%

34%

FNB/First National Bank

Capitec

ABSA/Bankfin

Standard Bank/Stannic

Old Mutual

Discovery

Nedbank/Peoples Bank

Liberty Life

SA Home Loans

Sanlam

Outsurance

Hollard Insurance

Post Bank/Post OfficeWesbank

Auto & General

Investec

First for Women Insurance

FNB, Capitec and ABSA are the most recognized banks in South Africa

Awareness of financial institutions

Q6: Which of the following financial institutions, if any, are you aware of or have you ever heard of?Base (weighted): All respondents n=1,000; answer categories Other and None/Dont know not shown

95%

95%

94%

93%

92%

91%

90%

90%

88%

88%

88%

86%

85%85%

84%

84%

84%

Awareness of financial institutions

All respondents



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Ownership financial products Purchase financial products (past 12 months)

Savings account

Current account

Credit card

Life insurance

Car insurance

Home loan/Bond/Mortgage

Personal loan

Home insurance

Travel insurance

Ownership and purchase of financial products


All respondents

62%

61%

45%

34%

30%

29%

28%

24%

1%

South African onliners own on average 4 financial products - 1 insurance and 3 other financial products

Q7: Which of the following financial products, if any, do you currently personally own, at each of these financial institutions?Q8a: And which of the following financial products, if any, have you acquired for your own personal use in the past 12 months, for each of these financialinstitutions? Base (weighted): All respondents n=1,000

33%

29%

17%

11%

13%

9%

18%

9%

1%

Savings and current accounts as well as credit cards are the most commonly owned and acquired

financial products

Overall 70% of the SouthAfrican onliners made a

purchase in the finance verticalin the past 12 months.



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FNB/First National Bank

ABSA/Bankfin

Standard Bank/Stannic

Nedbank/Peoples Bank

Old Mutual

Discovery

Sanlam

Capitec

Liberty Life

Outsurance

African Bank

Woolworths Financial Services

Momentum

Wesbank

Metropolitan

Auto & General

Hollard Insurance

Santam

SA Home Loans

Edcon Financial Services

Product holding is highest at FNB with internet users having acquired more products from FNB than from

any other bank

Ownership / purchase of financial products - Banks

41%

41%

32%

22%

21%

18%

17%

15%

15%

12%

34%

27%

19%

19%

9%

11%

7%

16%

6%

9%

11%

11%

10%

8%

8%

7%

7%

7%

6%

6%

11%

9%

4%

5%

3%

5%

4%

4%

4%

3%

products currently owned at products acquired in past 12 months

Q7: Which of the following financial products, if any, do you currently personally own, at each of these financial institutions? Q8a: And which of the followingfinancial products, if any, have you acquired for your own personal use in the past 12 months, for each of the following financial institutions?Base (weighted): All respondents n=1,000; Purchasers of financial product/s in the past 12 months n=701


All respondents / Purchasers of financial products



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Highest cross selling potential for current and savings accounts

Repertoire of past 12 m. financial product application

Products acquiredin past 12 months

Insurances Other financial productsLife

insurance

Car

insurance

Home

insurance

Travel

insurance

Savings

account

Current

account

Credit card Home loan/

Bond

Personal

loan

in % (n=110) (n=129) (n=87) (n=7) (n=330) (n=285) (n=170) (n=88) (n=181)

Life insurance 100 28 28 58 17 21 28 45 25

Car insurance 33 100 54 63 16 20 25 32 19

Home insurance 22 36 100 97 11 16 25 37 16

Travel insurance 4 4 8 100 1 2 3 4 2

Savings account 51 40 40 61 100 32 45 36 44

Current account 53 45 52 89 27 100 60 60 49

Credit card 44 33 48 72 23 36 100 55 36

Home loan/Bond/Mortgage 36 21 38 52 9 18 28 100 18

Personal loan 41 27 34 55 24 31 38 37 100

Read: Of Internet users who acquired a current account in the past 12 months, 32% also acquired a savings account, 36% also acquired a credit card, 31% also acquired apersonal loan, etc

= highest cross-usage = second highest cross-usage !** very low incidence n


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In general South African onliners tend to acquire products at more than one bank

Financial product application Top 10

Financialinstitutions forproducts acquiredin past 12 months

FNB NedbankStandard

BankCapitec Discovery

African

BankOld Mutual Outsurance Sanlam

ABSA/Bank

fin

in % (n=240) (n=134) (n=132) (n=112) (n=79) (n=75) (n=65) (n=61) (n=51) (n=189)

FNB 100 18 20 29 25 37 35 46 32 22

Nedbank 10 100 18 27 29 19 17 31 48 15

Standard Bank 11 18 100 15 29 22 35 40 26 16

Capitec 13 22 13 100 22 33 28 11 21 15

Discovery 8 17 17 16 100 7 14 20 19 7

African Bank 12 11 13 22 7 100 20 13 22 11

Old Mutual 9 8 17 16 12 17 100 28 23 16

Outsurance 12 14 18 6 15 10 27 100 25 14

Sanlam 7 18 10 10 12 15 18 21 100 11

ABSA/Bankfin 17 21 23 25 16 29 48 44 41 100

= highest cross-usage = second highest cross-usage

Q8a: And which of the following financial products, if any, have you acquired for your own personal use in the past 12 months, for each of the followingfinancial institutions? Base (weighted): Purchasers of financial product/s in the past 12 months n=701

!* low incidence n


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Face to Face

By phone

Online

By email

Other

By post

By fax

Dont know / not sure

74%

24%

17%

7%

5%

3%

1%

7%

Online is on 3rd position as method to apply for financial products face-to-face is the most common

method

Method of application / acquiring

Q12: Now thinking about the products that you acquired or applied for in the past 12 months, how did you acquire or apply for each product?Base (weighted): Purchasers of financial products in the past 12 months n=701

Application method

Purchasers of financial products in the past 12 months



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Past 12 month application method differed, depending on the financial product - online applications

highest for credit cards and personal loans

Method of application / acquiring

Method

Insurances Other financial products

Homeinsurance

Lifeinsurance

Carinsurance

Travelinsurance

Currentaccount

Savingsaccount

Credit card Personalloan

Home loan/Bond/

Mortgage

in % (n=87) (n=110) (n=129) (n=7) (n=285) (n=330) (n=170) (n=181) (n=88)

Online 11 3 16 3 9 9 19 19 8

By phone 42 20 55 12 4 2 22 15 9

By email 2 9 9 9 3 0 3 1 18

By fax 2 22 2 0 0

By post 12 0 4 3 1 2 1

Face to Face 24 57 14 57 76 81 55 63 53

Other 7 12 2 3 2 2 0 1 8

Dont know / not sure 6 6 1 5 4 5 3 4

= most popular methodof application

= second most popular methodof application

!** very low incidence


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You are a customer of this bank, it was convenient

The price of the product/fees

The reputation of the bank/financial provider

The product features offered / benefits received

The advice of a friend/relative/spouse/acquaintance

The advice of a consultant of this bank/f inancial provider

The advice of an Independent Financial Advisor (IFA)

Other

The advice of an insurance broker

None/Dont know

45%

38%

32%

28%

27%

21%

14%

11%

11%

8%

Purchase decisions were mainly influenced by convenience, trust (customer loyalty + brand

reputation) as well as competitive prices

Factors influencing decision to apply/acquire

Q11: When you purchased these financial products, which of the following factors influenced your decision to acquire this product through this particularprovider / bank? Base (weighted): Purchasers of financial products in the past 12 months n=701

Factors influencing decision to apply/acquire - total

Purchasers of financial products in past 12 months



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Apart from Word-of-Mouth and TV the internet is an important source for creating awareness andsupporting research for financial products: 38% of the purchasers researched online prior to purchase

Source of awareness / research



Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product/s in the past 12 months n=701; answer categories Other and Dontknow/cant remember" not shown

I was already client - product recommended by consultant

TV

Internet

Saw the product advertised in the branch

Newspaper / Magazine

Independent Financial Advisor

Radio

Insurance broker

Billboard

45%

23%

14%

8%

7%

12%

4%

9%

4%

12%

33%

24%

26%

26%

9%

14%

7%

7%

58%

56%

38%

34%

34%

20%

18%

16%

11%

first mentioned other mentions



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TV

Internet

Newspaper / magazines

Radio

Billboard

TV ads are the most commonly cited traditional media source creating awareness online sources on

position 2 already ahead of print

Source of awareness traditional media


23%

14%

7%

4%

4%

33%

24%

26%

14%

7%

56%

38%

34%

18%

11%






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Client and recommended through consultants

Internet

Saw the product advertised in the branch

Independent Financial Advisor

Insurance broker

Apart from in-branch consultancy the internet plays an important role among non-traditional media for

creating awareness

Source of awareness non-traditional media





45%

14%

8%

12%

9%

12%

24%

26%

9%

7%

58%

38%

34%

20%

16%



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Credit Card (n=170)

Car insurance (n=129)

Personal Loan (n=181)

Current account (n=285)

Savings Account (n=330)

Home Loan / Bond / Mortgage (n=88)

Home insurance (n=87)

Travel insurance (n=7)

Life insurance (n=110)

4 out of 10 credit card purchasers of the last 12 months did first hear or research about these products

online

43%

32%

32%

26%

23%

23%

19%

11%

7%

Online as a source of awareness / research

Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product/s in the past 12 months; answer categories Other and Dont know" notshown

Online as a source of awareness / research


!** very low incidence n


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Importance of online for creating awareness and supporting research differs per insurance product

strongest for car and home insurances

Source of awareness insurances

Q9: Thinking specifically about the financial products that you ve acquired or applied for in the past 12 months, where did you first hear or find out about eachproduct you purchased / applied for in the last 12 months? Q10: Where else did you hear about, find out about or research each product you purchased /applied for in the last 12 months? Base (weighted): Purchasers of financial product in the past 12 months Life insurance n=110, car insurance n=129 , homeinsurance n=87, travel insurance n=7; answer category Other not shown; !** very low incidence n


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Those respondents intending to acquire a financial product are most likely to apply for car insurances,

personal loans or home loans

Future application intentions

Car insurance

Personal Loan

Home Loan / Bond / Mortgage

Life insurance

Credit Card

Home insurance

Savings Account

Travel insurance

Current account

17%

13%

13%

13%

12%

10%

9%

6%

5%

Q13a: Which of the following products, if any, do you intend to purchase/apply for in the next 12 months?Base (weighted): All respondents n=1,000; answer categories Other and None of the above not shown

Intend to purchase next 12 months

All respondents

South African onliners plan to

purchase on average 1financial product in the next 12months.

Overall 46% of the SouthAfrican onliners dont plan to

make a purchase in thefinance vertical in the next 12

months.



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3 out of 4 purchase intenders are likely to research online for their next financial products, but also 3out of 4 of those who havent done online research so far intend to do so in the future

Likelihood of researching products online

Q13b: How likely are you to research any of these financial purchases/applications online?Base (weighted): Purchase intenders n=540; Purchase intenders who researched online n=216; Purchase intenders who did not research not online n=443

23% 19% 21%

52% 58%

75% 77% 72%

17% 18% 21%

51%

6%4%

4%

15%13%13%

Very likely

Fairly likely

Fairly unlikely

Very unlikely

How likely are you to research your next financial products online?

Purchase intenders

Purchaseintenders

Researchedonline in the past

12 months

Researched notonline in the past

12 months



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1 out of 4 finance purchasers used a mobile for research purposes highest likeability for mobile research on savingsand current accounts

Mobile research prior to purchase

Yes

25%No

75%

Mobile research prior to purchase

Purchasers of financial products in past 12 months

Q10a: For which of the following financial products that you purchased / applied for in the last 12 months did you use a mobile device in order to informyourself prior to purchase? Base (weighted): Purchasers of financial products in the past 12 months n=701; answer category Other not shown

I used a mobile device (e. g. netbook,smartphone, tablet, etc.) for researchprior to purchase

Savings account

Current account

Credit card

Personal loan

Home loan/Bond/Mortgage

Car insurance

Home insurance

Life insurance

Travel insurance

9%

9%

4%

4%

2%

2%

1%

1%

0%



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Almost a quarter of those who researched for financial products via mobile devices used theirsmartphone

Devices in use for mobile research

80%

Laptop/ netbookon the go

1%

Tablet PC

24%

Smartphone

Feature/ WAP phone

5%

Q10b: And which of the following devices did you use in order to inform yourself prior to purchase?Base (weighted): Researchers via mobile devices n=178

To inform myself prior to purchase I used

Researchers via mobile devices

Other mobile phone

18%



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26

Unpacking online behaviour


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Websites used to research financial products

Online researchers

Search engines

Corporate websites of major banking brands

Finance portals

Blogs and consumer review sites

News websites

Price comparison sites

Other type of website

Dont know/cant remember

Search engines are by far the most popular online information source to research financial products - 7out of 10 online researchers use them

Websites used to research financial products

72%

27%

25%

10%

10%

8%

2%

1%

Q14: You said that you used the Internet to research some of the financial products that you acquired in the past twelve months. Which websites did you use toresearch these financial products? Base (weighted): Online researchers n=216



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29%39%

32%

55% 39%

85%79%

67%

4% 2%10%

36%

1%

7%

There is strong agreement that researching online is quick and easy while offering lots of valuableinformation for decision support

Evaluation online research process

Evaluation online research process

Online researchers

strongly agree

agree

You easily found theproducts / information that

you were looking for

There was a hugeamount of information

available to help you with

your decision

Researching financialproducts online was a

quick process

disagree

Q16: Could you tell me to what extent you agree or disagree with the following statements regarding the research you conducted via the Internet.Base (weighted) : Respondents who research the products online n=216

strongly disagree



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I prefer to speak toa consultant so thatyou can ask advice

I do not trust onlinesources to giveaccurate and

impartial

information

I tend to researchfinancial products

online beforeapplying offline

I visited the internetbut there were no

application offeringsonline

There is very littlefinancial information

available online

Attitude towards online research

Attitude towards online researchOnline researchers

Q17: Please could you tell me whether you agree or disagree with the following statements regarding the research you generally do for these products via theInternet? Base (weighted): Online researchers n=216

40% 31%15% 10% 6%

38%

19%

1% 0%

78%

51%

21%11% 7%

-1%

5%

25%54%

66% 70%

6%

28%33%27%17%

42%33%

7%1%

3%

strongly agree

agree

disagree

strongly disagree

Researching online prior to an offline purchase is quite common among online researchers, most of them are aware ofonline application and information offerings



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Online Banking


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Use of online bankingAll respondents

Two thirds of all respondents use online banking, almost 40% of the non-users intend to do so in thefuture

Yes 66%

No 34%18% 21% 21% 30%10%

quite likelyvery likely neither/ nor very unlikelyquite unlikely

Likelihood of online banking in futureNon-user online banking

Online banking: usage and usage intention

Q19: Do you currently use online banking for your own personal banking transactions? Q20: How likely would you be to use online banking in the next 12months? Base (weighted): All respondents n=1,000; Non-users of online banking n=336

39%



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Im afraid my money / personal information wont be safe

I am used to traditional (in-branch) banking

I just havent got round to signing up yet

I prefer to speak to the bank consultants and get advice/ information

I only have limited access to the internet

Its too complicated

Its more convenient for me to go to the bank

It involves additional costs

I have a poor internet connection, it makes online banking very slow

You cannot bank online with my banking provider

I didnt know you could bank online

I didnt know you could bank online with my financial provider

31%

29%

23%

18%

15%

12%

10%

10%

2%

2%

0%

0%

Main barriers for online banking are safety issues, traditional in-branch banking and needs for personalconsultancy

Barriers for online banking

What are your reasons for choosing not to bank online?

Non-users of online banking

No, I dont use onlinebanking.

34%

No, I dont useonline banking

Q21: What are your reasons for choosing not to bank online?Base (weighted): Non users of online banking n=336; answer categories Other and Dont know not shown



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Mobile banking


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Received transaction alerts by SMS

Received account alerts by SMS

Checked your account balance

Topped up your mobile phone credit

Transferred funds between your accounts

Checked your recent transactions

Transferred money to others

Made bill payments by accessing mobile internet

Call centre of your bank to do banking activities

Paid for transactions by accessing mobile internet

Changed your banking PIN number

Checked stock prices by accessing mobile internet

Received stock price alerts by SMS

None of the above

Banking related activities using mobile phone past 12 months

All respondents

The vast majority of the South African onliners uses mobile banking - receiving transaction or accountalerts by SMS is most popular

52%

36%

31%

25%

21%

21%

20%

16%

15%

15%

6%

2%

2%

30%

Banking related activities using mobile phone

Q22: Which of the following banking related activities have you done in the past 12 months using your mobile phone?Base (weighted): All respondents n=1,000; answer category Other not shown

70% of the South Africanonliners use mobile banking



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Receive transaction alerts by SMS n=481

Receive account alerts by SMS n=643

Check your account balance n=689

Check your recent transactions n=789

Transfer money to others n=803

Transfer funds between your accounts n=786

Pay for transactions by accessing mobile internet n=854

Make bill payments by accessing mobile internet n=837

Top up your mobile phone credit n=749

Change your banking PIN number n=944

Call centre of your bank to do banking activities n=847

Receive stock price alerts by SMS n=982

Check stock prices by accessing mobile internet n=976

39%

30%

29%

21%

24%

25%

25%

27%

19%

18%

15%

11%

10%

22%

27%

24%

32%

23%

21%

19%

18%

18%

15%

16%

11%

11%

61%

57%

54%

53%

47%

47%

44%

44%

37%

33%

31%

21%

21%

Interest in banking related activities using mobile phone

Respondents who dont use the respective activity so far

High interest in various mobile banking activities visible top three activities are receiving transactionor account alerts and checking account balances

Very interested Quite interested

Interest in banking related activities / mobile phone

Q23: How interested would you be in using the following banking-related services on a mobile phone?Base (weighted): Respondents who are interested in banking related activities not using mobile phones; answer category Other not shown



36/38

30% of the South African Onliners use a mobile device in order to access the internet smartphonesmost popular in this respect

Internet usage on mobile device

Q10b: And which of the following devices did you use in order to inform yourself prior to purchase?Base (weighted): All respondents n=1,000

Internet usage on mobile device

All Respondents

Yes 30%No 70%

26%Smartphone

Tablet 3%

Other mobile phone 10%

Feature / WAPphone

6%



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Reading your account details on the phone

Buying air time or phone credit

Getting money out of your bank account into your phone

Receiving payments for your goods or services

Paying bills like for water, power, rates

Transferring money from your phone into your bank account

Paying for items in a shop or restaurant or bar

Paying post-paid phone bills or fixed line phone bills

Give instructions to your bank

47%

38%

21%

19%

16%

13%

10%

9%

9%

34%

25%

34%

46%

47%

43%

50%

34%

49%

20%

37%

45%

35%

37%

45%

40%

58%

42%

Almost 5 out of 10 mobile internet users read account details on the phone, 4 out of 10 buy air time orphone credit

Use of financial services via mobile internet

currently doing not interestedwould like to do

Q10c: Which of these do you currently use your phone for and which would you be happy to use your phone for, even if you are not doing it now?Base (weighted): Users of mobile devices in order to access the internet n=301

Use of financial services via mobile internet

Respondents who access the mobile internet30% of the South Africanonliners access the mobile

internet via smartphone, tabletPC, WAP / Feature phone or

other mobile phone



38/38

Management Summary

1 The internet is a relevant channel for creating awareness, supporting research and purchasing financialproducts however, there is still some scope for growth.

2Online is among the top application methods with 17% of the past 12 month purchasers having applied

online. Credit cards and personal loans are the products most likely to have been acquired online.

However, overall offline is still the predominantly chosen application method with face-to-face and

phone applications in the lead.

3

Researching online is perceived as a convenient method for collecting pre-purchase product

information and 38% of the purchasers researched online prior to their purchase. 3 out of 4 purchase

intenders in the next 12 months are going to prepare their next purchase on the internet. Most onlineresearchers are ROPO customers: 78% agree that they usually purchase offline after having

researched online.

4Among the online information sources search engines are the top source for research on financial

products with Google being the most commonly used and best rated one.

Accordingly presence on Google enhances presence in the online research process and relevance for

the (offline) purchase.

5Both online and mobile banking are very popular and used by the majority of the South African onliners.The most popular activities are related to administration rather than to transactions, e. g. checking

account balances or receiving SMS alerts.

6 Mobile internet usage already established: 30% of the South African onliners use a mobile device foraccessing the internet - the vast majority (26%) of these use a smartphone.42S G l V ti l D Di Fi i l M 2012 |

shopping for financial products in south africa

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