ATLANTA—Even while financial institutions try to keep up with the latest banking innovations, more than a third of banked consumers actually believe that technology advances too quickly for them. However, institutions can make the transition easier with some personal attention. A recent study found that four out of 10 consumers would prefer to learn about new financial services technology by talking with someone at their bank or credit union, rather than learning it on their own.
This joint, in-depth study into consumer characteristics and their attitudes toward and use of technology such as online and mobile banking was unveiled by First Data, a global leader in electronic commerce and payment processing, and Market Strategies International, the respected global market research consultancy, during First Data’s Leadership Summit 2011 – its annual conference for First Data financial institution clients.
The purpose of the study is to help financial institutions better understand which investments in technology will drive increased loyalty and transaction frequency among a wide variety of customers, as well as to identify trends about retail banking customers’ perceptions and relationships with their financial institutions.
“Our goal is to provide real, actionable data to help our financial institution clients develop focused technology plans,” said Larry Drury, senior vice president, Global Marketing, First Data. “These results will help our clients strike the right balance between technology and personal relationships regarding their retail banking customers.”
Study Highlights
The study provides insights into the relationships between consumers’ interest in and usage of technology and innovation, their attitudes toward their financial institutions, the banking products they use, and the impact of the economy on their behavior. Some notable findings include:
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Only 15 percent of consumers are currently using mobile banking, and 3 percent indicated they intend to start using mobile banking in the next 12 months. Nearly half of consumers (47 percent) are familiar with the service but are not using it, indicating that consumer education is still needed regarding the benefits of mobile banking.
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While two-thirds of consumers are familiar with account alerts, only 37 percent of banked consumers currently use them, indicating a possible need for financial institutions to shift some of their focus from awareness to activation.
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Six in 10 consumers surveyed still receive paper statements, representing a tremendous opportunity for cost savings for financial institutions.
Study Identifies Six Distinct Consumer Banking Segments
One way for financial institutions to determine appropriate investment strategies in technology is to better understand technology from banking consumers’ perspective. The research identified six distinct categories, or segments, of banking consumers based on key demographic, behavioral and attitudinal differences, including their inclination to use banking technology products and services. Simplified, those six segments are:
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Fast Trackers – young family types who rely on smart phones and banking apps
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Young Aspirationals – singles with varied interests and little banking loyalty
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Simplifiers – middle-aged lower income wage earners loyal to their local banks
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Middle of the Roaders – middle-aged wage earners who wait until technology is proven
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Value Seekers – older, well educated and financially comfortable who aren’t interested in a lot of technology
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Conventional Stalwarts – fixed-income retirees who prefer paper statements and live tellers
“Having a better understanding of consumers’ acceptance of technology, and the level of technology they’re comfortable with, will help financial institutions reverse the troubling trend brought on by recent economic challenges,” said Mark Willard, senior vice president and head of the Financial Services division, Market Strategies International. “We need to help financial institutions drive more transactions and strengthen loyalty. Our research points to the way technology can be leveraged to achieve those goals.”
About the study
Market Strategies interviewed a national sample of 2,000 consumers aged 18 and up between March 17 and March 24, 2011. Respondents were recruited from the uSamp opt-in online panel of US adults and were interviewed online. The data were weighted by age, gender, and household income to match the demographics of the US banked population. Due to its opt-in nature, this online panel (like most others) does not yield a random probability sample of the target population. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections.
About Market Strategies International
Market Strategies International is a market research consultancy with deep expertise in the communication, energy, financial services, healthcare and technology industries. We design and implement the most intelligent research and deliver meaningful results that help companies make business decisions with complete and total confidence. Founded in 1989, Market Strategies is the 17th largest research firm in the U.S. according to “Honomichl Top 50,” published in the June 2010 issue of Marketing News.
About First Data
Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive customer revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction.
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