Earlier this year, our research team took a closer look at crypto investment. It’s a subject that generates a lot of headlines but we wanted to look beyond the hype to understand the demand and needs of the market. Alongside extensive desk research, we spoke with investors who were already investing in crypto or planning to do so as well as banks and wealth management firms in Germany, Switzerland and the UK about the topic. Our aim was to find out from current crypto investors and those interested in the topic how they perceive the role of established financial institutions in this new investment vehicle. We contrasted these results with a study of the plans, motivations and challenges of financial institutions in delivering crypto services.
Financial institutions may be underestimating the crypto opportunity
Our results showed that banks and wealth management firms may be underestimating the extent of interest and the type of service that many investors would expect from an established financial provider. This is why the research is so significant – it may help financial institutions realise the full opportunity that crypto presents and it may broaden the adoption of crypto to a wider audience. The study included a closer look at what would make those currently on the fence start investing in crypto and how banks can win new clients with a crypto service. Contrasting the insight from potential investors with the current initiatives and future plans of banks suggests that current strategies are not completely aligned with market demand. In fact, for most organisations, their stated target market represents just 4% of the total market opportunity for crypto.
Looking beyond the headlines for a commercially viable crypto strategy
The research demonstrates why it’s so important to challenge any assumptions and look beyond the headlines when it comes to important topics that require change. A wider demographic target may have implications for how a service is designed and delivered and this in turn will have an impact on its appeal and success. Looking further into the details of what potential crypto investors require, it’s clear that greater education and support is needed in this area. This represents a significant opportunity for established banks and wealth management firms that already have a reputation as a trusted organisation. Given the current economic picture, many financial institutions have already started to roll out education programmes and support for money management. Our research suggests that introduction of crypto education may prove to be a valuable addition to the brand that attracts new customers and gains the bank a larger share of wallet.
A closer look at consumer demand and the current strategy of established FIs
Read our new vital research into crypto "Crypto and established financial institutions". Learn more about the varied requirements of current and potential crypto investors and how banks and wealth management firms are approaching the opportunity.