- Americans are paying more attention to personal finances than ever before.
- Financial companies can seize this moment to attract new customers and deepen existing relationships.
- Legacy institutions and disruptors are uniquely positioned to deliver delightful customer experiences well.
During COVID-19, 68% of consumers spent more time making decisions about their finances than ever before, new research from Google shows. Consumers took stock of their current situation, reassessed financial priorities, and explored new options in pursuit of their goals. Increased focus on financial wellness is good news for the financial sector, which has long struggled to get people more engaged with their money.
“Amidst the challenges of being stuck at home, one advantage was that I made time to optimize retirement plans, plan more thoughtfully for educational expenses, shop for better insurance, and even update estate plans. I know I’m not alone,” said Mike Henry, managing director for the financial services vertical at Google.
“This may be a once-in-a-generation moment for financial institutions to deliver a new level of helpfulness to consumers who are leaning in and shopping around. Companies that innovate are gaining market share and earning customer loyalty.”
More focus but also more anxiety
Although Americans, on average, are more engaged with their finances, many are more confused than ever, Google’s research found. The percentage of financial consumers who felt confident fell from 39% in pre-pandemic surveys to 27% more recently. And the percentage of financial consumers who say they feel overwhelmed grew from 16% to 26%.
“Consumers are looking for help to make better choices as they spend, save, invest, and protect,” Henry said. “Financial institutions should start by meeting consumers where they are today — online and on mobile devices — with features and functionality that are easy, fast, and personalized.”
Data suggests that many consumers have found those experiences by opening accounts with newer players in the financial services space. In fact, Google found that 43% of respondents are researching, exploring, and adopting financial disruptors. That’s more than double the rate from the start of the pandemic.
No pre-ordained winners
Newer companies, unencumbered by legacy systems and technology, have the advantage to build great digital experiences from the ground up. Legacy brands are finding that it’s not enough to rely on long-standing brand equity to protect and grow the business.
“Heritage financial brands no longer have a corner on the market in terms of trust,” Henry said. “Our research shows that consumers will place their trust in brands that deliver the most helpful experiences, regardless of how long the companies have been around.”
So are legacy brands in trouble? “Not necessarily,” said Henry. “Heritage brands have their own advantage. With decades of rich consumer data, established brands are particularly well-positioned to understand each customer and deliver the right offers and experiences at just the right moments.”
The challenge for legacy players is to organize and activate their data before disruptors gain more market share. Winners will soon emerge. But the biggest winners will be consumers who leverage new technologies to better understand their finances and improve their financial well-being.
Discover more insights on Think With Google.
This post was created by Insider Studios with Google.