Lenders avoid making use of financial comparison websites at their peril, particularly when it comes to Generation Y investors, warns comparison site RateCity.
Aged between 18 and 34, Gen Y is the most lucrative group of online banking customers and is more likely to search, compare and apply for financial products using the internet than any other age group.
According to RateCity's Insights Series: Comparison Audience report, Gen Y has a higher intention to switch or apply for financial products than other age groups, with 19% more likely to be looking to invest their money. Fewer Gen Y’s own a credit card compared to other generations, but more are planning to apply for a credit card in the next 12 months.
RateCity CEO, Alex Parsons, says the results reveal the serious segment of banking customers using financial comparison websites.
“Our visitors are serious about saving money. They want to know more about financial products, how their products compare and are willing to switch financial institutions if they find a better value deal. Financial institutions can't ignore the online comparison industry or they will face losing market share and miss out on an important source of banking customers,” he warns.
Parsons says the online retail space is growing rapidly in Australia and will become an even greater source of customers for financial institutions to target.
“Australians are spending more time online, comparing products and making purchases, than ever before and the numbers are growing. For instance, according to Nielsen research, over 11 million Australians visited a shopping website in March 2013, which was about three-quarters of all online Australians.”
“In the US and UK,” says Parsons, “the financial services industry has been revolutionised by comparison sites and Australia won’t be far behind. MoneySupermarket in the UK for instance, is valued at almost £1 billion (A$1.46 billion) and Bankrate in the US has announced an IPO with a likely value of over US$1.5 billion (A$1.42 billion).”
“While it’s great to see more financial institutions realising the benefits of investing in financial comparison websites…there are several institutions that are missing out on a significant opportunity to reach and acquire new customers.”