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A Look at Connected Banking Consumers

April 2, 2014

Banking isn't what it used to be. While the general premise hasn't changed much over time, the ways people manage their money are changing with the times. Digital, for example, is becoming a major avenue for many, and a significant portion of Americans actually prefer to handle their banking away from branches and tellers, according to Nielsen research. In fact, people who bank away from physical branches make up a significant portion of the "Connected" segment of the population and prefer to handle their finances via mobile devices or call centers.

Connected bankers make up 33 percent of U.S. households, and they're worth getting to know — but not just to understand their banking preferences. The Connected segment is diverse well beyond how it banks. The consumers in this group are the youngest bankers (18-34) and 47 percent have kids. They're also more racially and ethnically diverse than the other four consumer banking segments Nielsen has identified.

So what do connected bankers look like? As the youngest segment, they're still in school or at the early stages of their careers. Given their age and career experience, their incomes (under $50,000) and income-producing assets (less than $25,000) are notably lower than their older counterparts. That said, however, they're young and represent a demographic that's just starting to develop a banking profile.

The Connected segment is the least homogeneous of the five segments Nielsen has identified. That's because it includes significant variety in race and family profiles. The group includes large groups of Caucasians, Hispanics and African Americans, as well as singles and couples. About 47 percent have kids and only 30 percent are homeowners. They're also scattered across the country, with many opting to live in pockets of the Sunbelt such as Fresno, Calif., Waco, Texas and Las Vegas, Nev.

Banking Preferences

As the name of the segment suggests, many Connected bankers are heavily reliant on their mobile devices, particularly their smartphones, to manage their finances. Many in this group are banking on the go — 47 percent say they've used mobile banking in the last 30 days, particularly via their smartphones. Of this group, 26 percent use their mobile devices to check their account balances, and 20 percent say they prefer to open new accounts via mobile. Still, the group isn't just made up of techies. It also includes people who frequently use call centers, as 37 percent say they've used a call center in the last 30 days. Of those who use call centers, 37 percent say that's the avenue they prefer when trying to resolve an issue.

Preference Drivers

As is the case in other industries, one-size-fits-all approaches aren't effective in banking. Connected consumers look to mobile and call centers for different reasons, and these two avenues aren't interchangeable across consumer preferences. For example, Connected consumers view mobile banking as a convenient and quick option that they feel comfortable with and understand how it works. They don't need to interact with a live person for everyday banking needs, but they prefer call centers when they do want to interact with a live person.

There are ways, however, to broaden the banking horizons of Connected Consumers. For example, of those who don't prefer to bank at branches, 47 percent cite lack of convenience as a primary factor and 34 percent say physical bank branch banking takes too long. So retail banks that take steps to enhance convenience and speed up the banking process will be in a good position to win over these consumers.

And by the same token, there are ways to appeal to consumers that have yet to feel comfortable with online banking options. Of the group that prefers to stay offline to bank, 35 percent say online banking isn't convenient and 25 percent say it's not fast enough. So to gain traction with these consumers, banks should seek ways to boost online banking speeds and improve online experiences.

Methodology

The custom study was based on an online survey of U.S. consumer households in November 2013. The study included questions on channel usage, drivers of channel usage and barriers of channel usage.

Source

"A Look at Connected Banking Consumers." Nielsen Newswire, 2014.

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