72% of adults under age 30 who are shopping for checking accounts are also in the market for other banking products. To capitalize, institutions must align their channel experiences, offer rewards for deeper relationships and focus on cross-selling in the branch.
Over the last few weeks we surveyed checking account shoppers on FindABetterBank.com and found that 63% of these shoppers are also shopping for other banking products. Seventy-two percent of shoppers under 30 are shopping for more than just a checking account – 36% also want a savings or money market account and 26% also want a credit card.
Financial marketers should consider these three ideas when trying to win over Gen-Y consumers:
Align channel experiences. Research has revealed that younger consumers would rather open accounts in branches because they want to make sure they’re getting what they really need. When we observe Gen-Y consumers, we see how a poor online presentation eliminates many institutions from consideration. One way to align channel experiences is to train the branch sales staff to sell using website content instead of the traditional tri-fold brochure. Of course, branch staff can’t effectively use the website to sell if it isn’t working when shoppers are alone online at home.
Reward deeper relationships. Many institutions already offer rate discounts if certain loans are paid through an account transfer from a checking account. But a small percentage of young consumers are shopping for mortgages compared to the number that are shopping for checking accounts or credit cards. Data suggests young consumers are more likely than others to be interested in additional account features like debit rewards cards. Checking accounts that reward customers for deeper engagement could persuade younger consumers to consolidate more of their financial products under your roof.
Cross-sell in the branch. Given young consumers’ product-centric online behavior, it can be difficult to get them to notice cross-sell offers through an online experience. But young consumers will go into a branch to open an account and when they do, this is going to be your best opportunity to cross-sell to them.
You’d think consumers who go for bank promotions might be your stereotypical deal-seekers and bargain hunters. But you’d be wrong…
Over the last six weeks, over 9% of bank shoppers on FindABetterBank.com selected checking accounts because they wanted to take advantage of a promotion. Interestingly, these shoppers were more demanding and had more appealing banking profiles than shoppers who weren’t motivated by promotions. Here’s what we can tell you about shoppers who take advantage of promotions:
- Carry higher balances. 54% of shoppers taking advantage of a promotion indicated that their typical lowest daily balance is under $500, compared to 61% of shoppers not taking advantage of a promotion.
- Use ATMs more and overdraw their accounts more. The traditional persona of a deal seeker is someone who carries a coupon organizer and only buys things when they’re on sale. But shoppers selecting accounts because of promotions are more likely to generate fee revenue because they use ATMs more and overdraw their accounts more. Poor cash management doesn’t fit the deal-seeker persona.
- Demand more features. Despite their elevated ATM use, those selecting accounts because of promotions are in-par with other shoppers in terms of their interest in surcharge-free ATM access and ATM fee rebates. However, they do identify more “must have” features than other shoppers. Many of these are value-add features like free printed checks and debit rewards cards.
Please see full article here: https://thefinancialbrand.com/37539/people-bite-promotions-arent-stereotypical-deal-seekers/
Research reveals that mobile bankers are demanding, and expect an array of modern features.
In the fourth quarter of 2013, over 25% of bank shoppers at FindABetterBank indicated that mobile banking is a “must have” feature when choosing a new checking account. But as most product marketers know, potential customers are rarely interested in one feature. We found that 92% of shoppers that must have mobile banking also indicated other “must have” features.
What other features do mobile bankers want?
Online Billpay. Over the last 8 quarters, we’ve seen overall interest in online billpay decline by 33%. In Q4 2013, 24.8% of shoppers said they want online billpay. But nearly half of those who must have mobile banking also said that they must have online billpay.
Mobile Check Deposit. In Q4 2013, 12% of shoppers overall said mobile check deposit was a must have and 43% of those wanting mobile banking also want mobile check deposit. When a shopper wants mobile banking and only one other additional feature, mobile check deposit is the most popular choice.
Email Alerts. Shoppers’ demand for email alerts correlates with smartphone ownership and take-up of mobile banking. This is because people with smartphones receive emails immediately and consumers want immediate access to alerts about their accounts.
Surcharge-Free ATM Access. We expect to see the correlation in interest in other electronic services, but a whopping 42% of people who want mobile banking also indicated that they want surcharge-free ATM access.
Please see full article here: http://thefinancialbrand.com/37024/mobile-bankers-want/
Are reloadable debit cards a viable alternative to checking accounts? Or are they a solution for the unbanked and those who don’t qualify for checking accounts?
For the last four months, FindABetterBank has presented four different reloadable debit cards to consumers shopping for a new bank or credit union. In Q4 2013, shoppers selected these products only 2.6% of the time. For comparison, shoppers selected a free checking account 50% of the time, while 47% of shoppers selected a checking account with a monthly fee.
Who interested in reloadable debit cards?
- Shoppers with lower balances. The average lowest daily balance for shoppers selecting reloadable debit cards is significantly lower than shoppers who selected traditional checking account products.
- Shoppers with fewer requirements. Reloadable debit card shoppers identified fewer features as “must haves” than shoppers selecting traditional checking accounts.
- Young shoppers. In Q4 2013, 11.6% of shoppers checked off that they wanted student checking accounts included in their results. Those selecting reloadable debit cards were 32% more likely to have requested student accounts (15.3%).
- Shoppers that use ATMs more frequently. 74% of people who chose reloadable debit cards indicated they use an ATM machine at least weekly, compared to 65% of all shoppers. It’s not surprising that surcharge-free ATM access is the most popular feature with these shoppers.
- Shoppers that over draw their accounts. You can’t overdraw reloadable debit cards, but 76% of shoppers selecting these products indicated they’ve overdrawn an account at least once over the last year, compared to 61% of shoppers who selected traditional checking accounts. This suggests reloadable debit cards appeal to shoppers that don’t qualify for traditional checking accounts. Many “second chance” checking accounts have high fees compared to reloadable debit cards.
Please see full article here: http://thefinancialbrand.com/36692/checking-accounts-or-reloadable-debit-cards/
In January 2014, a survey fielded on FindABetterBank.com asked smartphone owners whether they used their phone to make P2P payments within the last 30 days. Overall, the percentage of smartphone owners who have made a mobile P2P payment grew by 30% from April 2013 to January 2014.
How consumers have sent money to others using their mobile phones has also shifted since April 2013. Data reveals:
- • Banks and credit unions are losing the initiative. Most banks and credit unions treat P2P as a “bolted on” feature and it doesn’t receive a tremendous amount of marketing attention or promotion. As a result, the percentage of mobile P2P users taking advantage of their banks’ or credit unions’ mobile P2P feature has declined.
- • PayPal continues to reach into banks’ domain. Consumers’ use of PayPal for payments continues to grow. Currently PayPal is the dominant player in mobile retail payments, they’ve nearly caught up to banks in mobile P2P and they’re also gaining ground in mobile bill payments.
- • New entrants are winning business. Another reason why banks and credit unions are losing ground in the mobile P2P space is pricing. Many institutions that offer P2P charge transaction fees. New players (e.g., Venmo) have been winning the young urban set with free mobile P2P payments.
Please see full article here: http://thefinancialbrand.com/36533/mobile-person-to-person-payments-growth/
Consumers on FindABetterBank.com can now specify which financial institutions they wouldn’t consider banking with and why. Forty-eight percent of shoppers looking for a new checking product chose to eliminate at least one institution before seeing what the bank or credit union had to offer.
Here are the top reasons why checking account shoppers excluded an institution from their search:
- 1. Bad experience and PR have the biggest negative impact on customer acquisition. Nearly half of shoppers refused to consider an institution because of a bad experience or because they heard negative things about the institution. One large bank really needs to overcome some negative mojo – they’re being eliminated from 11% of all searches!
- 2. Lack of brand awareness hurts direct banks and smaller institutions. When a bank or credit union is eliminated because consumers are unfamiliar with the brand, most often the type of institution excluded is a direct bank, small community bank or credit union.
- 3. Inconvenient branch and ATM locations don’t automatically eliminate an institution. Many banks’ and credit unions’ primary marketing messages are still focused on convenience and accessibility of branches and ATMs. But data shows that in terms of new customer acquisition, these messages are resonating less and less.
Please see full article here: http://thefinancialbrand.com/36327/banking-customer-service-experience-acquisition/
In my newest article on the FinancialBrand.com, I talk about factors that consumers consider when they select specific checking accounts from different sized institutions.
When consumers shopping for new banking relationships visit FindABetterBank.com, they have a chance to compare which institutions and accounts will cost the least, meet their feature requirements and have the most convenient locations. But we find that there are no clear winners: Shoppers don’t all choose the account with the lowest fees or choose the account that meets all of their needs.
We ask shoppers why they chose specific accounts and we find that most give more than one reason. Someone who selects an account with the lowest fees may also like the convenient locations and the mobile app. Another shopper might select an account that doesn’t meet all their needs and costs more than other options because they feel it’s more accessible, or they have a recommendation, or there’s a promotion, etc.
Differences emerge when comparing shoppers’ responses based on the type of institution they selected. We found that:
- Fee-conscious shoppers still consider national banks.
- Price and convenience of locations were the top reasons why shoppers selected regional banks.
- Small institutions have a difficult time acquiring consumers who are concerned with ATM and branch locations, but win when it comes to shoppers who are price-sensitive.
- Direct banks appeal to feature-centric consumers
Read full article here: http://thefinancialbrand.com/36001/how-consumers-choose-checking-accounts-by-institution-size
Last month I reviewed the top 10 checking account trends in 2013. In my most recent article on thefinancialbrand.com, I discuss what checking account trends we can expect in 2014.
In 2014, the US banking industry will spend roughly $2 billion on advertising, marketing and promotions to appeal to the 11 million plus households that will establish new primary banking relationships during the year. Our research shows that many feature preferences that make banking more convenient and accessible will continue to gain more traction in 2014, but interest in one popular feature continues to fall.
Trends to look out for in 2014:
- 1. Demand for mobile banking will continue to grow.
- 2. Email alerts will gain more interest.
- 3. More shoppers will want ATM fee rebates
- 4. Interest in online billpay will continue to decline.
Please see full article here: http://thefinancialbrand.com/35922/checking-account-trends-2014
In 2013, over 5000,000 consumers visited FindABetterBank to shop for a new banking relationship or checking account. Here are 10 trends to wrap-up the year:
- 1.“Convenience” is the primary decision criteria for most shoppers. Shoppers on FindABetterBank select a checking account from a national bank over 40% of the time. Convenience of branch and ATM locations are the most cited reasons.
- 2. Young consumers tend to select national banks. While many consumers indicate say bank fees weigh prominently in their decision, over half of shoppers under 30 select a national bank, primarily because of branch and ATM locations.
- 3. Demand for mobile banking continues to grow. Nearly one in four shoppers now indicates mobile banking is a “must have” feature – a 28% growth rate compared to 2012. Mobile check deposit in now a must have feature for over 11% of shoppers – a 120% growth rate over 2012.
- 4. Consumers are less sensitive to fees. With the financial crisis in the rear-view mirror and the media focused on other topics, shoppers this year appear less sensitive to fees compared to last year – only 24% indicated that fees have motivated them to shop around compared to 42% last year.
- 5. Price-sensitive shoppers are more likely to select smaller institutions. Community banks and credit unions are most likely to win when price is the most important criteria.
Please see full article for the full list of 2013’s top 10 shopping trends: http://thefinancialbrand.com/35546/checking-account-trends-2013>
Today, the traditional market segmentation for the banking industry is usually based on income. But for bank shoppers, age is better than income as a predictor of checking account requirements, behavior and attitudes about different banking channels. In a recent survey on FindABetterBank, 63% of respondents over 40 years old reported daily checking account balances of more than $5000, but only 37% of those with income of $150,000 or more carry such high checking account balances. We’ve also found that shoppers with high balances have different banking requirements and attitudes about branches than high income shoppers. These three differences are:
1. High balance consumers are more tied to branch banking
2.High income consumers are more digital
3.High balance consumers use ATMs less
As banks target their “top shelf” checking account products at high income consumers, they ignore the value in also using age as a predictor of checking account behavior and requirements.
See full article here: http://thefinancialbrand.com/35207/age-income-bank-marketing-segmentation