The overall financial health of U.S. retail bank customers declined in May following two consecutive months of improvement as they confront an uncertain economy and persistently high cost of goods, a J.D. Power survey revealed.
The top reasons cited among those who say they are worried their personal financial condition will worsen in the next three months are inflation, job security, government policies, housing and personal debt.
After a two-month reprieve, the number of customers who are financially healthy dipped to 32%, according to the report, which is in line with the level observed during the previous 12 months. For a second consecutive month, 70% of bank customers said the cost of goods is increasing faster than their income. That percentage dipped slightly among healthy (57%) and overextended (58%) customers but rose among vulnerable (79%) and stressed (84%) customers.
Despite a decline in overall financial health, the number of bank customers who believe their future financial health is at risk of getting worse in the next three months has dipped slightly. Overall, 41% of customers think their finances are at risk, a 3-percentage point decrease. Stressed customers are the most concerned (46%).
When asked what they are most worried about in the next three months, cost of living expenses still topped the list, followed by managing household costs. Interestingly, concerns about the stock market declined 5 percentage points (22%).
For banks looking to help customers navigate these uncertain times, building a relationship and understanding what each customer values is key, survey results showed. “Not all customers will have the same fears or needs, and they’ll require an individualized approach based on their finances, age, future plans and a host of other variables,” study authors noted. “Banks that can cater to these specialized needs will build valuable relationships that will last beyond this period of volatility.”
