By Kate Young
How many people are happy with their bank? More than you think. According to a recent consumer trends survey published by Fiserv, a whopping 76% of surveyed consumers rated their primary financial institutions as an eight or higher on a 10-point scale. And 28% gave their financial institution a “perfect 10.” Customer longevity seems to back this up: 52% have held an account with their institution for a decade or more.
Great news. Time to call it a day? Not quite.
This research provides an intriguing window into the needs, attitudes and behaviors of financial services consumers. The quarterly survey, conducted by Harris Poll and published in April, polled more than 3,000 U.S. adults belonging to a household with a checking account at a bank, credit union, brokerage firm, or other financial institution. Survey data were then weighted to reflect the demographic characteristics of the U.S. population as a whole. And as with any set of survey data, the real story emerges when you look beyond the headline numbers.
Marketers, take note
Despite the high satisfaction ratings, surveyed households reported doing business with an average of four different financial institutions. Why? Because by spreading their business around, they could take advantage of a wider variety of benefits, including:
- Better rates or better rewards on credit cards
- Better interest rates on long term accounts
- Better investment results
- Multiple perks
Survey respondents also reported on a number of pain points. These are particularly significant because more than half the respondents (53%) view financial institutions as partners in managing their finances. That represents a huge opportunity. Yet nearly half (48%) indicated that they don’t have anyone to rely on for financial advice. And the pain goes on:
- 60% agreed with the statement, “Managing money is something I have to do, not something I want to do.”
- 45% agreed that it’s a chore to think about how to manage money.
- 32% say they get conflicting opinions about how to handle their finances.
- 25% report feeling lost when they try to manage their household expenses.
With that in mind, perhaps it’s not surprising that respondents did not give themselves high marks for financial management—a B grade on average for paying bills, a B- for sticking to a budget, and a C+ for saving for long-term goals like college or retirement.
And even though use of checks and ATMs is on the decline, 49% reported that they still use a checkbook to track their finances.
What’s now the number one way to open many accounts and loans? Hold onto your hat: it’s visiting a branch.
That said, online payments have seen a rapid increase in use, and mobile payments are beginning to pick up steam. Consumers say they want the convenience of digital services.
- 75% of households want real-time balances on all their accounts.
- 72% want instant posting of transactions.
- 48% reported an interest in a “name your price” tool.
- 25% want the ability to manage all accounts from different institutions using on online location or app.
All these numbers and trends paint a picture of a population of consumers who want to simplify their financial lives, but still need help with some of the more complex transactions—and technologies.
Don’t Dismiss the Demographics
Of course, these numbers start to look different when you break them down by age group. Among early millennials, (those aged 18-24), only 65% rated their primary financial institution as an eight or more on a scale of zero to 10.
The younger customers, as expected, express the greatest demand for financial innovations.
- 80% of early millennials and 83% of late millennials (those aged 25-25) want real-time balances.
- 84% of early millennials and 86% of late millennials want instant posting of transactions.
As these customers age, their preference for digital services isn’t likely to go away. Banks that ignore these preferences do so at their own risk.
Where is the love?
With so many yet-to-be-met wants and needs, what is the source customers’ high satisfaction rates? According to Fiserv, these favorable opinions of financial institutions are “driven predominantly by a positive reputation and excellent customer service, regardless of the size of the institution.”
Look at it this way: if you’re a bank, this group of customers has just given you a huge gift. By telling you what they need, consumers have provided a lot of answers.
The question is, what are you going to do about it?
Kate Young is the content editor of ABABankMarketing.com. Email: kyoung@aba.com