It is no secret that the world of consumer financial services is rapidly evolving. Consumers can access more services online and, increasingly, they can access financial services via non-financial brands. The recent launch of Coop Finance+ is a great example. Coop, Switzerland’s biggest retailer, now offers household accounts, payments, budgeting, pensions, and investments in a simple app, fully integrated with its other digital services.

Is Coop ahead of the curve, or is it providing something that consumers already see as essential? And how do wealth managers fit into this rapidly expanding financial ecosystem? Should we use technology to make services more efficient for existing clients or to make them accessible to a much wider customer base? Can we do both? Should a wealth platform fit for 2030 be 100% digital, or is there value in human interaction? Advances in technology have created so many different possible business models that formulating a digital strategy can seem overwhelming.

To get some perspective, it helps to go back to the people with the opinions that really count - consumers. In this fast-moving environment, making assumptions about what consumers want is easy, but there is no substitute for proper market research. additiv’s forthcoming Consumer Study 2024 aimed to capture consumer preferences around online financial services. We surveyed 4,500 consumers from ten countries, including Switzerland, and hope that our findings will help providers create better digital strategies.

Swiss consumers are ahead of the curve
When it comes to the adoption of online services, our survey has found that Swiss consumers are typically ahead of the global average and significantly ahead of the rest of Europe. This holds for both financial services and non-financial services. For example, 50% of Swiss respondents used an online investment broker at least quarterly, compared to only 36% in the rest of Europe, and over 75% used social media, news, mobility, gaming, and e-commerce apps. A notable exception is represented by Super Apps, which have yet to achieve real momentum in Europe but, according to our survey, are used quarterly by an astonishing 97% of consumers in South-East Asia and 86% in the Middle East.

1a. Which online financial services do you use at least quarterly?

1b. Which online non-financial services do you use at least quarterly?

2. Other than traditional financial service providers who do you trust to provide regulated financial services (top 3 choices)?

Financial services do not need to come from financial brands
Our 2024 survey reinforced one of the key conclusions from our previous survey (with a smaller audience) in 2023: consumers are increasingly ready to trust non-financial providers to deliver regulated financial services. While consumers have high levels of trust in traditional banks, trust in other financial services providers was less consistent. In contrast, consumers are prepared to trust a surprising range of non-financial providers (chart 2), suggesting that the playing field is wide open for new entrants to the financial services ecosystem. The top reasons for trusting a provider were reputation and customer service, with Swiss consumers highly valuing customer service.

Opportunities lie in cooperation, not competition
If consumers are happy to take financial services from non-financial brands, what does that mean for existing financial service providers? Let’s go back to the Coop example. Coop did not do this by itself - it plugged into the wider financial ecosystem to find and connect to suitable partners. It needed a range of regulated financial services, FinTech providers, and an orchestration partner to pull the whole platform together.

The arrival of non-financial consumer brands in the financial ecosystem is a huge opportunity for the wealth management market. The reality is that, with the exception of bank accounts, non-financial services are significantly ahead of financial services when it comes to consumer engagement (see charts 1a and 1b). However, the consumer brands offering these services can be seen not as a threat but as a whole new set of ready-made distribution channels. It is just important for wealth managers to be ‘embedding ready’, i.e. ensuring that their core services are readily accessible to third parties - whether financial or non-financial - via digital platforms.

Digital does not need to mean 100% digital, especially for wealth managers
The changing financial landscape is not just about embedding financial services into non-financial consumer platforms. We are also seeing new levels of automation and efficiency. Clearly, this allows greater scalability and the potential to make services more accessible and affordable to a mass market. But how far should that automation go and do consumers still value the personal service that is the cornerstone of traditional wealth management?

3. Have you received investment advice in the past 12 months (Swiss respondents by age bracket)

Our 2024 Consumer Study examined consumer preferences regarding investment advice in depth. We found that 43% of Swiss respondents had received investment advice in the past 12 months. This was above the global average and significantly higher than the European average of 30%, but it still means that the majority had not received investment advice. The top reason consumers did not want advice was that they did not think their income was high enough to save, suggesting that there is still a perception that wealth management is only for the wealthy.

Interestingly, younger Swiss respondents were much more likely to have received advice (chart 3), despite having lower average incomes. This is perhaps because they are more active users of online services - both financial and non financial - than the other age brackets and more open to receiving advice via an online platform. However, even in this younger age bracket, the preference was still for a human financial adviser.

4. How do Swiss consumers prefer to receive advice?

In our survey, 46% of Swiss respondents (in line with the global average) preferred to receive advice from a financial adviser. This creates a challenge for wealth managers looking to scale with digital platforms, but not an insurmountable one. Critically, a significant minority would actually prefer a digital service with adviser access, and overall, a slight majority prefer either fully digital or digital with adviser access. Clearly, many consumers value the personalised service that wealth managers provide, but many are also open to some form of digital service.

In this situation, hybrid platforms are the obvious solution. Those better automated can be automated, while those that need to be personal remain personal, but also become more accessible. A good hybrid platform will offer 24/7 access to portfolios, research and online tools like simulations, plus communication tools for booking in-person, or online sessions with advisers. For many consumers, the resulting experience could be more personalised and more efficient. Meanwhile, the advisers themselves can access a whole range of communication and admin tools to allow them to dedicate more time to their clients.

In the financial and FinTech communities, there is a growing expectation that the future will be hybrid rather than 100% digital. Having this reinforced by consumer research should give wealth managers the confidence to move forward with hybrid platforms.

Interested in reading the full report? You can read this edition of the Swiss WealthTech Landscape Report 2024 online here.