Security and data protection highlighted as the primary area for improvement and innovation within financial services by 68% of investors.

(London, May 2017) Cybersecurity and privacy issues are a leading cause of concern when it comes to digital investing, new research shows.

A CoreData Research study surveying 334 US investors found nearly seven in 10 (68%) think security and data protection is the area that most needs improvement and innovation across the financial services industry.

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Privacy and data security also emerge as the greatest concern (63%) for those using automated advice.

Among respondents not using mobile investment apps (tech-conscious and tech-adverse investors), concern over cybersecurity (35%) is the second most cited reason for not doing so. And those currently using mobile investment apps (tech-savvy and tech-responsive investors) cite cybersecurity concerns (56%) as the second biggest drawback of these technologies.

Recent high-profile hacking attacks have exposed the vulnerability of online data as cybersecurity takes on added importance.

“Our study shows cybersecurity concerns are uppermost in the minds of US investors,” said Craig Phillips, head of International, CoreData Research. “This suggests the mobile investment apps that can demonstrate they have robust, secure and safe propositions will be best placed to win the trust of investors. Providing investors with a secure digital experience will be key.”

The top reason tech-conscious and tech-adverse investors do not use mobile investment apps is lack of sufficient knowledge (42%) and the biggest perceived drawback of mobile investment apps for the tech-savvy and tech-responsive investors that do use them is their lack of complexity (59%).

Meanwhile, investors think mobile apps will be a major channel through which financial advice is delivered in the future. Although just two in 10 (22%) of all respondents currently use mobile apps for receiving advice, over seven in 10 (72%) think it is likely they will use mobile apps for receiving advice in five years. This proportion increases to eight in 10 among Millennials (81%).

Investors also believe that digital advice will continue to play a significant role in the financial services industry. Respondents say automated advice (35%) will have the greatest impact on the industry five years from now, followed by artificial intelligence (24%) and blockchain (14%).

Most investors in the survey found their advisor through a digital channel. Over four in 10 (44%) used online research, one in five (21%) received a recommendation from a friend or relative and one in 10 (12%) responded to digital advertising.

Key Findings

Reasons investors don’t use mobile investing apps (multiple answers)

Lack of knowledge: 42%

Cybersecurity concerns: 35%

I prefer my human advisor to handle my investments: 19%

Lack of complexity: 17%

Poor design/small screen features: 17%

Too little money to invest: 17%

Drawbacks of using mobile investing apps (multiple answers)

Lack of complexity: 59%

Cybersecurity concerns: 56%

Poor design/small screen features: 41%

Too few investment options: 26%

Too little investment information available: 20%

Narrow list of performable tasks: 20%

Investor concerns with automated advice (multiple answers)

Privacy and data security: 63%

Interface issues/poor design: 35%

Algorithm faults: 34%

Lack of human interaction: 28%

Lack of transparency: 26%

  • Security and data protection (cited by 68% of respondents) is the primary area investors think the industry should further innovate and integrate technological improvements.

Notes to Editors

-CoreData Research surveyed 334 US investors in late March of 2017 about the future of investing. Survey respondents had to have at least $5,000 in net investable assets, be between the ages of 21 to 65 and own a smart device.

– For the study, CoreData identified four investor segments in terms of level of digital investing:

  • Tech-savvy investors are those who currently personally invest or have personally invested using mobile/tablet apps. This segment accounts for a third (32%) of investors participating in the survey.
  • Tech-responsive investors are those who use or have used mobile/tablet apps to monitor their investments but not to invest. This group represents 16% of investors.
  • Tech-conscious investors are those who have invested or monitored their investments online (via websites on desktops/laptops). While these investors do not have any interaction with investing apps, they make use of some digital investing offerings. This group represents a third (32%) of investors.
  • Tech-adverse investors are those who have never invested or monitored their investments using any digital platform (i.e. smart devices or desktops/laptops). This group represents a fifth (20%) of survey respondents.

For further information, please contact Will Roberts at CoreData Research UK on +44 (0) 207 600 5555 or [email protected]

About CoreData Research

CoreData Research UK is the London-based arm of a broader global specialist financial services research and strategy consultancy.

CoreData Research understands the boundaries of research are limitless and with a thirst for new research capabilities and driven by client demand; the group has expanded over the past few years into the Americas, Africa, Asia and Europe.

The London division is part of the CoreData Group and has operations in Australia, the United Kingdom, the United States of America, Malta, Mexico, Singapore, South Africa and the Philippines.

The group’s expansion means CoreData Research has the capabilities and expertise to conduct syndicated and bespoke research projects on six different continents, while still maintaining the high level of technical insight and professionalism our repeat clients demand.

With a primary focus on financial services CoreData Research provides clients with both bespoke and syndicated research services through a variety of data collection strategies and methodologies, along with consulting and research database hosting and outsourcing services.

CoreData Research provides both business-to-business and business-to-consumer research, while the group’s offering includes market intelligence, guidance on strategic positioning, methods for developing new business, advice on operational marketing and other consulting services.

CoreData Research prides itself in identifying market trends at the earliest opportunity and formulating insightful quantifiable research that clients can use to help them stay ahead of the market and better meet the day-to-day challenges facing their businesses.

Our focus is on bringing deep market knowledge to research and strategy development. The group’s research is not just about information and data but at providing insight so clients can develop strategies that work.

The team is a complimentary blend of experienced financial services, research, marketing and media professionals, who together combine their years of industry experience with primary research to bring perspective to existing market conditions and evolving trends.

CoreData Research has developed a number of syndicated benchmark proprietary indexes across a broad range of business areas within the financial services industry.

  • Experts in financial services research
  • Deep understanding of industry issues and business trends
  • In-house proprietary industry benchmark data
  • Industry leading research methodologies
  • Rolling benchmarks

The team understands the demand and service aspects of the financial services market.

The group conducts regular research in banking, mortgages, retail saving, pensions, asset management and the financial advisory sector.

It is continuously in the market through a mixture of constant researching, polling and mystery shopping and provides in-depth research at low cost and rapid execution.

The group builds a picture of a client’s market from hard data which allows them to make efficient decisions which will have the biggest impact for the least spend.