Price comparison websites (PCWs) used to save UK shoppers hundreds of pounds. In the 90s, these websites revolutionised the way people organised their personal finances, saving them money and becoming the consumer’s secret weapon. Fast forward 20 years and the personal finance sector has changed dramatically – yet price comparison websites have largely remained the same.
Speaking to The Fintech Times, CEO and co-founder of Anorak, David Vanek explains how price comparison websites need to up their game to keep up with personalised services customers demand:
Today, presenting the cheapest option just doesn’t cut it anymore. Customers expect more from their financial services and much better value for money. Having once been innovators within the space, it’s high time that PCWs adopt the underlying common theme all personal finance providers are focusing on: personalisation.
Why we need personalised protection insurance advice
When it comes to protection products like critical illness cover, life insurance and income protection, it’s crucial that these complicated products are understood in full before customers decide which policy to purchase. Traditionally these products are recommended via a financial advisor, as they are so complex it’s almost impossible to understand which policy does what, without a decent grounding in industry knowledge. Although price comparison websites are excellent at narrowing down the cheapest options, when it comes to complex products like insurance and protection policies, it’s more important to understand the buyer’s needs and what kind of protection their unique set of circumstances will need. Protection products need to suit these down to the letter, as purchasing the wrong product could leave policy holders vulnerable or hanging in the balance if they do indeed need to fall back onto their policy.
Products like life insurance have seen a spike in demand over the pandemic, as earners safeguard themselves and their families’ future, following a year and a half of economic and emotional turmoil. Now more than ever, the tools customers have used for the last 20 years to access the best financial services for them, need to catch up with the times by providing the right information to help people find the right cover.
Millennials demand smarter online services
Having grown up in the wake of the financial crash, millennials harbour a distinct distrust for larger financial institutions, and are much more comfortable sharing their personal details with independent or online services to help them find the right financial products. These younger earners gravitate towards personalised services, relying on smart data (incl. Open banking) to help guide their journey. Services like Snoop (Money saving app) and Plum (Investment app) are great examples of this trend.
Millennials now expect a certain level of personalisation. Without it, it’s possible that they could choose the wrong kind of income protection, life insurance or critical illness cover for their specific circumstances, leaving them and their family exposed if anything bad was to happen. By presenting the cheapest option as opposed to the most suitable, PCW’s are leaving buyers vulnerable to making a 25-year long commitment to a product which might be wrong for them. These complicated products demand a certain level of tailoring for the individual, or at least advice on which product might be best. Millennials will gravitate towards services that provide this additional layer of insight, so if PCW’s want to stay competitive, or even relevant, they need to factor in these demands from their millennial users.
Millennials want it all and they want it now
Mobile technology and continuous access to the Internet has changed how people access information about financial products and services. It’s easy to feel overwhelmed by the plethora of options and advice readily available online, in addition to new challenger services like banks or protection providers. Our research shows that on average Brits are willing to spend just 49 minutes looking into life insurance products in total, leaving users with little time to properly comprehend their priorities and which products might be suitable for them. Knowing what policy you need is about understanding your options and requirements, which is hard to achieve in such a crowded, noisy marketplace.
Cutting through this noise comes down to providing the right, viable options for users. As opposed to providing a mass of cheap options, PCW’s should enhance their service by helping their users buy suitable products, providing the best value for money and prioritising the right kind of cover for people. Personalisation is the key to this offering to keep pace with the competition and ensure services aren’t misleading customers.
Putting an end to the advice gap through personalised financial tools
Financial advice has been associated as a luxury accessible only to those who can afford it, with limited face-to-face advice from bank branches over the last year and a half due to the pandemic. As a result, we’ve seen this existing “advice gap” widen. At the same time alarmingly 50% of UK mortgages have no protection insurance in place what-so-ever, leaving 8.5 million breadwinners unprotected, with those who have less access to financial information more likely to fall into this category of risk. PCW’s are in a unique position to help close this advice gap by educating users and giving them personalised guidance on financial products, tailoring the information and recommendations to the user’s needs.
Personalising information to the individual helps people better understand their needs, by educating and equipping them with the knowledge they need to get the right protection in place for them and their families. Some sites are already adopting integrated human and digital expertise to cater to the “complex needs” of customers seeking protection products, with Anorak doing so in the life insurance space in the UK.
It’s high time PCW’s adapted to the needs of their modern-day users. With so much information on financial products readily available, their services need to be intelligent enough to navigate the different options available to them, and to understand how to prioritise their users’ needs above all else. It’s time price comparison websites get personal with their users, to help them make the best decisions for their financial futures.