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Robo-Advisors Aren't Your Father's Financial Advisor

Posted by Lori Vellucci

Tue, Dec 12, 2017

Back in the day, if you had a little money to invest, you called up the brokerage firm that your dad used, you talked to his“guy” and you asked him to invest your money for you. Those days aren’t totally gone, but over the last few years new technology has disrupted the traditional investor-client relationship—resulting in more ways than ever to invest your money yourself.

We all remember the iconic E*TRADE baby from way back in 2013. E*TRADE’s campaign brought the online discount stock brokerage firm for self-directed investors model into the mainstream. Since then, more DIY investment platforms have cropped up, each vying for the modern self-directed investor’s business. But one important learning from the DIY trend of the past decade is that even though this model lends itself to independent investing, DIY-investors still need some type of investment help.

Robo-advisors: The rise of AI in finance

The first robo-advisor was released in 2008 to help these new investors make smart money choices. For the most part, early DIY investors didn’t have a formal finance background, so robo-advisors offered them portfolio management services and insights that were once reserved for high-net-worth individuals—at a fraction of what a traditional human financial advisor might charge. It was a gamechanger.

Robo-advisor technology continues to shape the financial services industry with big players like Charles Schwab and Ameritrade each launching their own in the last few years. This growing interest and investment in robo-advisory technology is great for DIY investors and offers a ton of opportunity for traditional financial firms be on the cutting edge of FinTech.

Given the changing landscape, we wanted a better understanding of investor perceptions of robo-advisor clients.  Through our 2017 Consumer Pulse, we surveyed 2,000 US adults about FinTech, traditional financial services firms, and who they perceived as the technologies' typical user.

Who's using robo-advisors?

Typical Robo-Advisor User.png

CMB’s AffinID (a measure of social identity’s influence on consumers) score for this FinTech offering indicate that while all three components of AffinID (clarity, relatability, and social desirability) could stand improvement within the investor community. Relatively speaking, relatability is weakest--people have a clear image of what the typical robo-advisor user is like and that image is socially desirable, but they don't view the typical user as part of their "tribe".

The inability of investors to relate to their image of the typical robo-advisor user sheds light on a potential roadblock. Robo-service providers targeting traditional investors might consider messaging that conveys a typical user more closely aligned with the “traditional investor image”.

What emotions are driving use?

We found that robo-advisor users themselves are driven by feelings of being smart, wise, and savvyefficient, practical, productive.  Inspiration and motivation are also key emotional drivers for robo-advisor services.

Emotions that drive robo-advisor usage2.png

Why does this matter? It tells us what brands looking to differentiate themselves in a crowded FinTech market could be doing to attract more customers. These emotional drivers could be important messaging elements for those companies looking to court new money from traditional investors.

Are robo-advisors the next "big thing" in FinTech?

FinTech adoption curve2.png

Three quarters of robo-advisor users consider themselves early adopters, this is in contrast with users of mobile wallet and online-only banking--two technologies that have entered the mainstream. As traditional financial service providers make considerable investments in driving robo-advisor adoption, our findings show that to drive adoption it's critical to understand both how consumers want to feel, and how they perceive and relate to their image of the typical user.

Interested in learning more?

Our comprehensive FinTech study also looked at online-only investment apps, online-only banking, and mobile wallets. Download a sneak peek of our findings from all four in our Facing the FinTech Future series:

Topics: financial services research, Identity, AffinID, Artificial Intelligence, BrandFx

New Study: Busting Millennial Banking Myths

Posted by Megan McManaman

Thu, Mar 03, 2016

Why does MasterCard want to replace your password with a selfie? How did Venmo become a verb? Why did JPMorgan Chase's CEO fret about Silicon Valley's start-ups to investors last year? Part of the answer lies within the attitudes and needs of that much talked about generation. . .Millennials. As part of our self-funded Consumer Pulse research, CMB partnered with leading venture capital firm Foundation Capital to explore how and why Millennials are helping redefine the banking industry

In this new report, insights include:

  • Millennials are not a homogenous group. We conducted a segmentation of Millennials, revealing five distinct personas with varied brand preferences, attitudes, and behaviors 
  • Most Millennials still use traditional financial products and services. Just over a third of Ambitious Adopters and Financial Futurists—the most forward-looking of the segments—say they’re most open to non-traditional financial services. 
  • Millennials place considerable importance on finance apps and tools. Asked which apps and tools they could not live without, Millennials mention financial tools and apps at the same rate as apps used for texting and messaging.

image-068859-edited

 Download the full report here!

Topics: infographic, financial services research, millennials, Consumer Pulse, market strategy and segmentation

Millennial Women and Planning for the Future

Posted by Lori Vellucci

Wed, Jan 27, 2016

Millennials_investing.jpgMy first real job came with an important-sounding title (Project Director) and all the things grown-ups look for in a position, such as health insurance and a 401K. I was 22 and didn’t know anything about retirement plans; retirement itself seemed to be in the infinite distance. My dad told me, “It’s free money. You can’t turn it down,” so I dutifully enrolled in the company’s program. When I left that job for a bigger title and a better salary, I promptly liquidated my 401K and took the cash. Retirement still seemed really far away and besides, even with my important sounding title, the salary hadn’t been nearly as impressive. Receiving a paycheck just once a month had left me with a lot of credit card debt, and I thought paying that down might be a better use for the money I had painfully put into a 401K each month over the previous several years. 

Since that first step on the career ladder, I’ve enrolled in other retirement plans with other employers, opened a SEP when I worked for myself, and acquired other investment vehicles over the years. Even so, based on many articles I have read, I will likely never make up for not contributing and staying invested in those first early years. 

CMB recently conducted a thought-provoking, nationally representative study on Millennials and money, and I wondered what young women today are doing and if they’re smarter about retirement and investing than I was at 22.

According to our study, overall, women ages 21-30 are driven, idealistic, and interested in furthering their education—more so than their male counterparts.

table1.jpg

Many are confident that if they budget and plan well enough, they will be shielded from financial setback. Further, a plurality feel they will reach their long-term financial goals and the majority plan to have more than just their employer-sponsored retirement plan when it comes time to retire. Most of these young women feel confident that they are saving enough for their future! So far, so good.

Millennials_Investing2.jpg

But wait—nearly twice as many young women don’t feel confident making their own investing decisions compared to men, and more than four in ten feel they would invest more if they understood it better.

table3.jpg

While young men and women participate in an employee sponsored retirement plan at about the same rate, women are significantly less likely to own mutual funds, individual stocks, and to have their own brokerage account.

table4.jpg

Certainly, there has been a great deal of reporting on women’s reluctance to discuss financing and investing. Women often indicate feeling less confident in their knowledge, even as they tend to have lower risk portfolios, which perform just as well as those of male investors.

Traditional financial services investment firms have made efforts to tailor content and offerings to younger women, and websites like GoGirlFinance have also sprung up to fill a real void. But are these new sites reaching young women in a compelling and meaningful way? 

As co-author of our Millennials and Money study and partner at Foundation Capital, Rodolfo Gonzalez notes: “The financial services industry is at a critical juncture. We are seeing a lot of companies emerge to address the financial needs and expectations of the Millennial audience. The Millennial consumer expects a mobile, on-demand, simple, and useful user experience as they are the first digital natives. In the future, we can expect to see start-ups emerge to focus specifically on women and financial services.”

Even so, are they reaching young women in a compelling and meaningful way? A very good question.  Not wanting to rely just on our statistically meaningful, nationally representative study, I conducted an office poll...

They feel unprepared to invest on their own:

 “Not confident in my knowledge about investments; seems like a risk.”

“I have thought about trying it, but I feel uneducated on what would be a good investment. I would like to try to dive into investing on my own and experimenting with a small amount of money in the next few years.”

 “I am not at all confident in investing on my own. It is very foreign to me, so (although I feel like I probably should be) I just don’t do it.”

Further, closer-in priorities tended to over-shadow investing and saving for retirement:

“I am most focused on saving for my wedding and a house down the line.”

 “College debt is a huge one, I graduated with over $80,000 in debt, so that’s a huge hindrance to reaching some of my financial goals.”

“In addition to college debt, there’s my car payments, saving to buy a house/condo, and getting married in the next few years.”

 “My college debt is a concern, but mostly I just focus on my day to day expenses (rent, activities, and food). In my mind, any savings I have are designated for travel.”

Many of the young women in the office combine traditional banks with online tools like Mint or Personal Capital to manage their finances:

 “Currently I mainly manage my finances on a pen and paper ledger #oldchool but I check my accounts daily – Bank of America, Citizens, Capital One—and I log on to all loan platforms multiple times a month. I have used Mint before.”

“I use the app Mint to keep track of my finances. I also use apps for each savings/checking account I have (Bank of America, Charles Schwab, USAA) that I monitor.”

“Mint.com is great for monitoring all my accounts at once since it all pipes in, but not for budgeting. I just use Excel to actually manage my finances.”

While these women certainly have dreams of retirement in the abstract, for many it still feels very far away:

“Retirement is so far away for me right now—I just let my contributions go into my account automatically and hope that what I’m doing now will be enough and will be worth it when retirement time comes.”

 “What I’m contributing right now feels like it should be enough, but how can I know what will happen in the next ~50 years?”

“I wish I was more involved with my retirement and could a higher percentage of my paycheck, but I know I’ll have that chance down the line, so I’m not worried right now.”

It’s clear financial service providers, both traditional banks and start-ups, have a lot of work to do to educate, motivate, and inspire young women investors. 

Want to learn more about Millennials’ financial needs and expectations as well as what that means for your industry?

Watch here!

Lori Vellucci is an Account Director at CMB.  She spends her free time purchasing ill-fated penny stocks and learning about mobile payment solutions from her Gen Z daughters.

Topics: financial services research, millennials, Consumer Pulse, webinar

Busting Millennial Money Myths at Money 20/20

Posted by Megan McManaman

Thu, Oct 22, 2015

money2020.pngEvery day there’s a new report about Millennials—they’re in debt/they’re saving for retirement, they’re mobile/they’re going off the grid, they’re hard workers/they’re too entitled to succeed—the list goes on. Brands are desperate to learn what makes this generation tick, but the current research lacks actionable insights for the marketers trying to serve them.

To dig deeper, we partnered with venture capital firm Foundation Capital to clear through the clutter and to learn what Millennials are doing and thinking about when it comes to their money. Through our Consumer Pulse research program, we surveyed 1,055 Millennials about their tech use and financial habits, and we included three “deep-dive” sections covering attitudes and preferences towards banking, investments, and insurance.

On October 26thCMB’s Lori Vellucci will join Foundation Capital’s Charles Moldow at the Money 20/20 conference in Las Vegas to unveil new insights into the needs, perceptions, attitudes, and actions of Millennials. They’ll take a look at the very different needs within this most talked about generation, the coming disruption, and the wave of innovation required to address their financial needs.

If you can’t make it to the conference, don’t worry! We’ll be sharing takeaways from our research in November.

For the latest Consumer Pulse reports, case studies, and conference news, subscribe to our monthly eZine.

Subscribe Here 

Topics: financial services research, millennials, Consumer Pulse, conference recap

When Only a #Selfie Stands Between You and Those New Shoes

Posted by Stephanie Kimball

Thu, Aug 13, 2015

mobile, shopping, mobile walletThe next time you opt to skip the lines at the mall and do some online shopping from your couch, you may still have to show your face. . .sort of. MasterCard is experimenting with a new program that will require you to hold up your phone and snap a selfie to confirm a purchase.  MasterCard will be piloting the new app with 500 customers who will pay for items simply by looking at their phones and blinking once to take a selfie. The blink is another feature that ensures security by preventing someone from simply showing the app a picture of your face in an attempt to make a purchase.

As we all know, passwords are easily forgotten or even stolen. So, MasterCard is capitalizing on technology like biometrics and fingerprints to help their customers be more secure and efficient. While security remains a top barrier to mobile wallet usage, concern about security is diminishing among non-users. In addition to snapping a selfie, the MasterCard app also gives users the option to use a fingerprint scan. Worried that your fingerprints and glamour shots will be spread across the web? MasterCard doesn't actually get a picture of your face or finger. All fingerprint scans create a code that stays on your phone, and the facial scan maps out your face, converts it to 0s and 1s, and securely transmits it to MasterCard.

According to our recent Consumer Pulse Report, The Mobile Wallet – Today and Tomorrow, 2015 marks the year when mobile payments will take off. Familiarity and usage have doubled since 2013—15% have used a mobile wallet in the past 6 months and an additional 22% are likely to adopt in the coming 6 months. Familiarity and comfort with online payments has translated into high awareness and satisfaction for a number of providers, and MasterCard wants a slice of that pie. Among mobile wallet users, over a quarter would switch merchants based on mobile payment capabilities.

mobile wallet, wearables

Clearly the mobile wallet revolution is well underway, but the winning providers are far from decided, and MasterCard is taking huge leaps to see how far they can take the technology available. If MasterCard can successfully test and rollout these new features and deliver a product that their customers are comfortable using, they can capture some of the mobile wallet share from other brands like Apple Pay and PayPal.

So what’s next? Ajay Bhalla, President of Enterprise Safety and Security at MasterCard, is also experimenting with voice recognition, so you would only need to speak to approve a purchase. And don’t forget about wearables! While still in the early stages of adoption, wearables have the potential to drive mobile wallet use—particularly at the point of sale—which is why MasterCard is working with a Canadian firm, Nymi, to develop technology that will approve transactions by recognizing your heartbeat.

Since technology is constantly adapting and evolving, the options for mobile payments are limitless. We've heard the drumbeat of the mobile wallet revolution for years, but will 2015 be the turning point? All signs point to yes.

Want to learn more about our recent Consumer Pulse Report, The Mobile Wallet – Today and Tomorrow? Watch our webinar!

Watch Here!

Stephanie is CMB’s Senior Marketing Manager. She owns a selfie stick and isn’t afraid to use it. Follow her on Twitter: @SKBalls

Topics: technology research, financial services research, mobile, Consumer Pulse, retail research

New Study: How Wearables Will Drive the Mobile Wallet Revolution

Posted by Abe Vinjamuri

Tue, Jun 16, 2015

Mobile2015IconEvery year we hear bold new predictions about mobile wallet, and every year those predictions fall flat. So, with some trepidation, we ask: is this the year when mobile payments finally take off?A lot of pieces of the puzzle are finally in place:

  • NFC and tokenization have been accepted as the standard for payment tech (QR is fighting a losing battle although some heavyweights still back it)

  • Networks (Visa, MasterCard etc.) have managed to co-opt the mobile revolution and avoid the threat of disruption

  • Credit card providers see the opportunity to drive growth

  • EMV (chip and PIN) standards have forced retailers to upgrade payment terminals which now are NFC enabled

  • Mobile service providers have given up their bid to control the payments business

  • And most importantly, consumers are increasingly comfortable with the idea of using smartphones to pay for purchases-they are at a similar point in the adoption curve as they were with online payments a decade and half ago

So, yes, mobile payments will grow in the next 12-18 months. And smartphones will continue to drive that growth.  But the big news is that mobile wallets are poised to get a major boost from the proliferation of wearables. In our latest Consumer Pulse study, we surveyed nearly 2,000 smartphone owners about mobile wallets and wearables awareness and habits. Here are a few of the key takeaways:

You want to put that chip where?

Formerly confined to fitness trackers, and to some extent smartwatches, wearables are still emerging for the average consumer. Currently, about 60% of the market is at least somewhat familiar with wearables in the generic sense. And with the pace of technology, this is a low barrier.  A new product that fulfills a need (perceived or not) can gain attention in the flash of a Snapchat.

As the wearables category broadens to include trackers, shirts, bands and other devices that are an extension of the wearer, mobile payments are a natural offshoot. In fact, beyond table stakes (battery life, pedometers etc.) 40% of likely wearable buyers want built-in mobile wallet functionality. Our data shows that wearable and mobile wallet adoption is symbiotic in nature. A majority of those looking to buy wearables say having mobile wallet functionality would bring them closer to the purchase decision. And a similar majority say they would use mobile wallets a lot more if it were a part of their wearable functionality. Looks like a win-win.

Good news for smartphone makers

Although at present wearables are primarily associated with fitness trackers (smartwatches are perceived a bit differently though that line is blurring really fast); many see wearables as an extension of the smartphone category – and expect smartphone brands to lead the wearables march. While the top players are as expected: Apple and Samsung, the door is still wide open for a variety of players like Google, Microsoft, Fitbit, Sony, Nike, and LG.  And perhaps the best news is that, in general, buyers expect highly functional wearables to cost between $175- $275. Of course, there are always those who are willing to splurge north of $400.

What about payment companies?

In all this excitement around wearables and mobile payments we can’t forget the critical role of payment companies. As mentioned previously, networks and credit card companies have a critical role to play. At the moment, usage data indicates two things: one, usage of credit cards in a mobile first world mimic that in the physical world – card usage behavior (primary card, share of wallet) has not changed. Two, checking accounts, debit cards, PayPal have a large presence on mobile wallets. We continue to maintain that mobile payments present an opportunity to shake up some of the existing stalemates in the industry and at present it seems like no single player has a decisive advantage.

What does all this mean?

Depending on how narrow or widely mobile payments are defined, the trillion+ dollar industry is fluid at the moment, with everyone trying to get a large piece of the pie. From a purely consumer-centric perspective, the barriers are lifting, the options are expanding and before you know it a majority of consumers will have access to mobile wallets through smartphones or wearables. The key to winning them over will be to make the experience natural and seamless. The day someone can put together an experience where my jogging shirt tells me to run faster between miles 5 and 7 and then pays for my smoothie is the day wearables would truly achieve their potential. I’m betting that the day is not far away.

Abe is a payment-tech and ecommerce Project Lead, Strategist, and CrossFit enthusiast.

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Topics: technology research, financial services research, mobile, Consumer Pulse, retail research

Infographic: What do Mobile Wallets Have to do With Loyalty?

Posted by Judy Melanson

Wed, Apr 03, 2013

The Mobile Wallet is a hot topic for those in the retail, technology and financial services industries. As you may know, mobile wallets allow customers to pay at store checkouts with a tap or wave of their smartphones. In our recent Consumer Pulse study of 1,500 smartphone users, we learned that half are unaware of Mobile Wallets.

To drive adoption, retailers and technology providers will need to overcome a lack of awareness and fear of new technology, all while offering a clear advantage over more traditional payment methods. As shown below, loyalty programs provide a key leverage point to drive Mobile Wallet adoption.

mobile wallet loyalty

Click to see larger version

Download our latest report on the Barriers and Opportunities for Mobile Wallet and learn more about what will drive (and block) adoption, and who has the advantage as we enter the next leg of the mobile wallet race.

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with clients on driving customer loyalty.  She's the mom of two teens and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

Topics: technology research, financial services research, mobile, Consumer Pulse, customer experience and loyalty, retail research

New Study: Consumers and the Race for Mobile Wallet

Posted by Megan McManaman

Mon, Apr 01, 2013

Mobile Wallet CMBYou’re about to step out your front door...

But wait just a moment! You can only take your phone or your wallet, which will it be?

Pre-smartphone there would be no contest, I’d take my wallet. But times have changed, and the balance has now tipped in favor of my beloved iPhone. Beyond checking email, I use my phone to deposit checks, see when the train is coming, read the news, record my ski stats, listen to music, and if I've also forgotten my lunch, I can use a mobile wallet app to buy a sandwich at the deli across the street.Of course there’s more to mobile wallets than the fate of my lunch, there are billions of dollars at stake for the banks, credit card companies, start-ups, tech giants and others who want to dominate, or just cash in on, the evolving relationship we have with our smartphones. In our latest Consumer Pulse, we surveyed 1,479 smartphone users about what they know about mobile wallets, what’s keeping them from using, what features they’d like to see, and who they'd trust to provide them.

First things first, half of respondents said they were familiar with mobile wallet technology (or proximity payments)—apps that let users swipe or tap their phone at the point of sale, rather than using credit cards or cash. When we asked this 50% to tell us about their experience and expectations for using mobile wallets most said they didn’t plan on adopting a mobile wallet…but nearly a quarter said they were planning to try out the technology in the next 6 months (TWEET THIS). That’s no small number considering smartphone ownership is nearly ubiquitous.

Now let’s consider our more reticent smartphone users, what’s keeping them from trying out the technology that’s already at their finger-tips? We weren’t surprised to find that security (73% called it a barrier to adoption)—particularly identity theft—was high on the list of what’s keeping people from giving up on cash and credit (TWEET THIS). The good news for mobile wallet providers is 79% said they’d be more likely to adopt if they were guaranteed 100% protection against fraud and theft. While many mobile wallet providers already offer this protection, the results show there’s a real opportunity to benefit from promoting this type of security measure (TWEET THIS).

If you’ve assuaged the fear of being scammed, stolen from, and over-charged (remember when people were afraid to shop online?) what’s next?  Aside from the novelty of scanning your phone, what’s the incentive behind using a mobile wallet over your, just as convenient, credit card? We found reward and loyalty points were very appealing, particularly when offered as additions to existing rewards people get with their credit cards—80% of non-adopters said they’d be more likely to adopt if offered these extra rewards (TWEET THIS). Of course people like rewards and points—you don’t need to be a marketer to understand that. But nearly as many (66%) said that getting the same rewards they got with their credit card would increase their likelihood to adopt—to which I say, c’mon people aim a little higher.

So yes, rewards are nice, but one of the best things about smartphones is the ability to look stuff up. Think of how many arguments have been nipped in the bud by a quick search of imdb.com or Wikipedia. That ability to find the information you want any time, any place, is just as compelling in a shopping context. Including location-based services like the ability to easily compare items in stores nearby increases likelihood to adopt among 78% of non-adopters (TWEET THIS). But we also found people were a little leery of getting too many alerts, both because they can be annoying and because they suck down battery life. Note to providers, offering people the choice of what alerts and discounts they receive could be a major draw as they decide who they’d like to provide their mobile wallet service.

The topic of mobile is rightly dominating the discussion in almost every industry, but the fact is, for most people mobile wallets are still incredibly new. Amid all the noise and growth, there’s still tremendous opportunity for providers who understand the concerns, goals, needs, and desires of the millions (billion?) of people with the technology right at their fingertips.

Mobile Moment ICON

Download the full report and learn more about what will drive (and block) adoption, and who has the advantage as we enter the next leg of the mobile wallet race.

 

 

 

Megan is CMB's Product Marketing Manager, she loves Alpine Replay, and longs for the day she can unlock the front door with her phone.

Topics: technology research, financial services research, mobile, Consumer Pulse, retail research

From ATM's to Mobile Banking: The Changing Meaning of "Great Service"

Posted by Christine Gimber

Wed, Aug 15, 2012

BayBank CardWhen I moved to Boston in 1988 for college, I was very excited to receive my first “BayBank card.” For those of you from the area, you’ll recall with a smile that BayBank was the dominant area bank; it subsequently merged with Bank Boston which then merged with Fleet. However, through all those changes everyone (at least in my circle) called their ATM card their “BayBank card.” Getting a BayBank card was really your only option if you valued the convenience of an ATM on each and every corner of the three mile stretch from Kenmore Square to Packard’s Corner in Allston. Back then I needed to get cash in $10 increments as easily as I could grab a slice at Captain Nemo’s Pizzeria on Comm Ave. or talk my way into Father’s First Bar in Allston.

Over time, however, my needs as well as my definition of convenience changed. As time marched on, I started to think about buying a home, saving, and investing. Convenience was still the most important thing to me, but convenience now meant ubiquitous ATMs, a close branch to open new accounts, as well as a host of connected financial products. I liked being able to do all my business in one place. I was an established customer, and pretty pleased with the convenience of one-stop-shopping.

However, I feel like a new definition of convenience is on my horizon having more to do with useful, practical technology solutions. I want to view my investments, credit cards, savings accounts for my kids, and checking accounts all on one screen. I want to work with my bank virtually; I have two checks in my wallet, just sitting there waiting for me to make my way to an ATM machine. There is one up the street, about a half block diversion from my train, but without exception I leave work later than I should in order to collect my children from their babysitter, so I bypass that ATM. So there they sit, my sad paper checks, uncashed in my wallet and feeling very inconvenient.

The latest Consumer Pulse study from CMB uncovers some very interesting findings regarding convenience and perceptions of value among consumers. Nearly half (48%) of bank customers believe banks can differentiate themselves with good service. But they are like me—the definition of “good service” is evolving; convenience is no longer just about more branches and ATMs, but also about innovative technologies and remote banking options.

The study also found that while larger banks have a reputation for offering the most online and mobile services, credit union customers report online banking usage that is just as high as larger bank customers, and they give their institutions higher marks on performance than they’re larger peers. I would never have associated credit unions with convenience, but technology and their smaller customer bases are leveling the playing field. I wish that I had remote deposit capture, and I hear rumors that my big-bank provider has it, but I can’t find any information about it on my online banking portal. Not very convenient.  

My brother-in-law is a 26 years old gadget-guy, and a rabid fan of USAA for both insurance and banking. He was never in the military (his grandfather was), so when I learned about his fandom, I was curious because it didn’t add up. I thought of USAA as traditional player, the epitome of an old-school company.  He cited “great service” as the reason he’s loyal. When I asked what he meant by “great service,” he mentioned that he was first among his friends to have remote capture deposit. Definitions of service and convenience are changing; it will be fascinating to see which financial institutions keep up.

Learn more about how technology is changing the definition of good service:

describe the image

 Download the full report: The New Banking Value Proposition.

 

 

 

Posted by Christine Gimber, Christine is an Account Executive with CMB’s Financial Services team. A few of the things keeping Christine from cashing those checks are her three little kids, and competing in triathlons.

Topics: financial services research, mobile, Consumer Pulse

Bank Approval: What Matters to Customers

Posted by Jim Garrity

Wed, Jul 11, 2012

If you believe the news you might imagine Americans have a pretty low opinion of bankers. It seems cut and dried; the recession laid bare a lot of anger over banks’ role in the economy’s crash.  But new insights from our Consumer Pulse research on banking approval, suggest bank customers’ views are a bit more balanced. We asked over 1,400 bank and credit union customers how they felt about their primary bank and the industry as a whole.  

We found that while it’s true that most Americans aren’t happy with the banking industry they are pretty happy with their own banks. This kind of discrepancy isn’t shocking or unusual— Congress has abysmal approval ratings, but people tend to rank their own representatives quite highly, clearly personal experience counts for a great deal.  

CMB bank approval
When we looked at customers' banking approval and experience we found some things worth noting:  

  • Approval ratings vary by bank type. Community banks and credit unions were rated more highly than regional and large national banks, with credit union customers giving high marks to many elements of their banking experience, from fees and rates to commitment to the community and remote banking offerings. In fact 85% of credit union customers rated the value they got from their bank as “excellent.”

  • As for what doesn’t appear to impact approval ratings, those with household incomes under 50k gave just slightly higher approval (51%) to their banks, compared to those making 100k or more (47%).

  • Just 9% of customers who disapprove of their banks (and 2% of all respondents) say they’re actively looking for a new bank, but willingness to make the switch also varies by bank type. A full 22% of regional bank customers who disapprove of their bank say they are actively looking for a new bank, versus only 7% of large bank customers. One explanation for this disparity is that while large banks are known for accessibility and product breadth, and small banks are recognized for personal service and lower fees; regional banks are often chosen for their proximity. And as we’ve seen in our previous Consumer Pulse research, increasingly that is not enough.

  •  Wondering why customers so displeased with their bank, end up staying? Over half (54%) agree switching banks is a hassle.

Amidst the real anger and displeasure aimed at banks and the banking industry as a whole, the real message may be: don’t underestimate the power of the customer’s banking experience. Fewer than one in five of respondents agreed that “all banks are pretty much the same.” This is good news for banks who can take the opportunity to differentiate themselves from the competition and from a terrible industry reputation.

Download The Future of the full-Service bank Branch here.CMB Banking Consumer Pulse

Posted by Jim Garrity, Jim is Managing Director of CMB’s Financial Services    practice. He isn't looking to switch banks anytime soon.

Topics: financial services research, Consumer Pulse, customer experience and loyalty