Women Call the Shots When It Comes to Banking

As women are taking a larger role in the economy, they require more tailored tools and solutions from their financial institutions. The Future of Financial Services Report indicated Gen Y women are expected to dominate higher education graduation rates and professional workforce entry, taking control of financial responsibility both as household CEOs, consumers and business decision makers fueling the She-conomy. Additionally the report states that by the year 2020, 60 percent of baby boomers will be women, the majority of whom will work beyond the traditional retirement age by starting small businesses and re-entering the workforce.

Women will hold a larger piece of the pie as is substantiated by reports from the CUNA Marketing and Business Development Council, which states that baby boomer women will control two thirds of consumer wealth over the next decade, and the book Women Want More which indicated by 2014 women could earn about $18 trillion a year and control as much as $28 trillion of spending.

With this customer segment growing in importance, financial institutions need to provide tools and solutions to not only balance a checkbook – but balance it all. Intuit Financial Services’ Fourth Annual Financial Management Survey found women have very strong opinions about the ways they like to bank.

Women prioritize online banking for convenient management of their finances:

  • One third of respondents said they would switch financial institutions for one that offers better online banking tools.
  • Women are also smart shoppers; 82 percent would use a service from their bank or credit union that provides discounts on products and services they already use.
  • Women are also high adopters of mobile banking to meet their busy lifestyle with more than one-fifth of women reporting use of their mobile device to access their bank account or use banking tools.
  • Mobile banking also serves as a good retention tool for this customer segment as 16 percent of women surveyed said they would switch financial institutions if theirs stopped offering mobile banking.

Lastly, in a time when consumers are finding their voice to demand the appropriate fees and offerings from their banks, 35 percent of women indicate they have already, or plan to switch where they bank due to increased fees.

Are you seeing women driving adoption of mobile or online banking at your financial institution? How do you see women shaping your financial management offerings? Let us know in the comments section below, or Tweet @bankingdotcom.

Consumers Are Increasingly Using Multiple Devices to Support Banking Needs

*This blog was originally posted on Bank Marketing Strategy by Jim Marous. Jim is a marketing services leader focused on building strategic solutions for the financial services industry. You can follow him on Twitter @JimMarous or connect on LinkedIn.

Traditional bricks and mortar facilities are being visited less as the use and importance of online and mobile devices continues to increase according to Intuit Financial Services’ 4th Annual Financial Management Survey released yesterday. According to the survey, while a large percentage of consumers still manage their finances offline (45%), the percentage of consumers using online services from their financial institution has continued to increase annually; increasing 11% since 2009 to 38% in 2011.

The main reason consumers said that they don’t visit their bank branch as often as they used to is because they are visiting their FI’s website and use their online banking tools (76%). These online banking tools are so important that one-third (33%) said they would switch their relationship to another institution if there were better online tools offered elsewhere.

The importance of online tools was reinforced by Brett King, author of the bestseller Bank 2.0 and founder of direct mobile banking start-up Movenbank at this year’s BAI Retail Delivery Conference in Chicago. “Banking is quickly changing from a place you go to something you do everyday,” stated King. He provided a chart from the American Bankers Association and Nielsen Research that illustrated the channel migration occurring today and projected in the future.

 

Source: ABA, Nielsen Research

It appears that the growth of mobile banking is only limited by the growth of ownership of a smartphone according to the Intuit study. Forty-one percent of all respondents indicated ownership of a smartphone, 23% said they used a mobile banking solution, and an additional 17% intend to try mobile banking in 2012. The primary reason consumers indicated that they do not use mobile banking was because they do not own a smartphone (25%) followed by the fact that they prefer to bank online (22%).

These findings are similar to the findings last week from comScore that drew a correlation between mobile banking and smartphone adoption. “The investments in mobile made by financial service institutions, along with the continued growth in smartphone adoption, have had a positive effect on the use of mobile financial services,” states Sarah Lenart comScore vice president for marketing solutions.

As expected, the adoption rate of mobile banking is demographically skewed. Young adults (aged 18-32) are three times more likely to carry their bank in their pocket, compared to Gen X, baby boomers or seniors. And while 65% of mobile banking users access their accounts through the internet/Web, 28% use a mobile application. “Regardless of age, each customer expects to connect to their financial institution in their own way,” said CeCe Morken, president and general manager of Intuit Financial Services.

In another Intuit study of more than 50,000 mobile banking customers, it was found that consumers tend to interact with their financial institution 45% more often if they use a combination of both mobile and online tools. These customer also tended to have larger relationships and a better retention rate.

“While we anticipate that there will be some mobile-only consumers, most people will be using multiple devices on any given day in the future,” said Intuit spokesperson Tobin Lee in a conversation yesterday. “Financial institutions must be prepared to deliver financial information and insights across multiple devices (PC, phone, tablet), optimized to the merits of each device it they are going to meet customer’s needs. If they don’t, someone else will . . . probably displacing a bank’s relationship.”

The desire for ‘anywhere app access’ is also supported by a just released study from Oracle entitled, Opportunity Calling: The Future of Mobile Communications – Part Two which found that while there was a stronger preference to use a tablet for mobile banking (34%) compared to a mobile phone (11%), the majority of consumers (55%) would prefer to use both devices. This is important to prepare for since the same study found that almost 30% of the U.S. mobile customers that do not already have a tablet device plan to purchase one in the next 12 months. These findings were also reinforced in last April’s, Intuit 2020 Report: The Future of Financial Services.

As customers continue to use multiple channels to connect with their bank, it will be increasingly important to have a 360-degree view of customer device touch points and to leverage the advantages of each device to provide an optimum customer experience. The current anxiety over online and mobile security needs to be addressed at the same time as innovations such as near field communication (NFC) and location based services get integrated into online and mobile solutions. Bankers will need to get ahead of the payments innovation curve and prepare for major distribution channel disruption. In short, banks will need to do a paradigm shift by becoming nimble at a time of increased regulation and consumer scrutiny.

Are today’s banks prepared for the massive changes ahead? Or will new online organizations such as Ally, BankSimple, Movenbank and others steal the hearts and wallets of Gen Y and device savvy consumers?

Leave us a comment below, or Tweet at the author @JimMarous.

Women Boomers Rise to Become Market Superpower

There’s no denying women are the next financial superpower. As demonstrated in the findings of the Intuit 2020 Report: The Future of Financial Services, women will be in the spotlight over the next decade as key financial decision makers. With Gen Y women projected to dominate higher education graduation rates and professional workforce entry, women are poised to take control of financial responsibility both as household CEOs, consumers and business decision makers fueling the She-conomy.

The Intuit 2020 Report also projects that by the year 2020, 60 percent of baby boomers will be women, the majority of whom will work beyond the traditional retirement age by starting small businesses and re-entering the workforce. Credit Union Magazine recently highlighted similar findings from the CUNA Marketing and Business Development Council which states that baby boomer women will control two thirds of consumer wealth over the next decade. Mary Brown and Carol Orsborn’ s book, Boom: Marketing to the Ultimate Power Consumer—the Baby Boomer Woman, supports this claim and outlines six important insights financial institutions might not know about their female boomer customers. We’ve included a few below.

  • Many boomer women are at the peak of their earning potential. Eight of 10 say they don’t plan to retire.
  • Many boomer women will manage inheritances from parents and husbands, as most will outlive their husbands by six to nine years.
  • Women ages 35 to 54 years old made up the highest proportion of web surfers. Direct catalog marketers estimate that women constitute 70% of online purchasers, the majority of whom are boomers.
  • Boomer women aren’t set in their ways. According to the Center for Women’s Business Research, 68% of women over age 35 old say that the older they get, the more they enjoy trying new things.

You can read the full list here.

How are you helping your female boomer customers? Do you have any advice on how to market your services to this female population?

Let us know by posting in the comments section below or tweeting @Bankingdotcom.

Reputation is the New Marketing Currency for FIs

The growth and convergence of the Internet, social media, and mobile technologies have created a disruptive shift in how businesses and their customers interact. Social media and other online connective technologies provide customers and prospects with an instantaneous, information rich platform for researching, discussing and buying everything from books to buildings.

This ability to access and share information has greatly increased pricing, product and corporate transparency, shifting market power from producers to consumers. It has also reduced the effectiveness of many of the traditional outbound marketing, communications and sales methods used by financial institutions.

The recent Banking.com post, Social Media Statistics: By-the-Numbers, May 2011, illustrates the size, scope and growing role of social media. Examples of some of key statistics included in the article are:

• 800,000,000 recommendations (aka ‘stumbles’) are made each month on news discovery service StumbleUpon

• 132,500,000 people in the US will log in to Facebook regularly this year; by 2013 that number will increase to 152.1 million

• 6 years of video is uploaded to YouTube every day

This massive increase in information, connectivity and transparency results in a greater role for corporate reputation in the purchase decision making process for both consumers and businesses. Because of this, financial institutions will need to build and manage their social reputations by actively participating in social media, delivering on commitments, building strong business relationships and providing value to their customers.

For more on this topic, please see the Intuit 2020 Report – The Future of Financial Services.

 

About Steve King:  Steve is a Partner at Emergent Research. His current research and consulting is focused on economic decentralization, the growth of small business and the future of work and workplaces. Steve has extensive consulting, marketing and general management experience with both large and small companies.  Steve is a senior fellow and board member at the Society For New Communications Research, a research affiliate at the Future of Work and an advisory board member at Pond Ventures.

About Carolyn Ockels:  Carolyn is the Managing Partner at Emergent Research.  Her current research and consulting is focused on economic decentralization, the growth of small business and Gen Y.  Carolyn has extensive consulting experience, and prior to Emergent Research managed Cambridge Energy Research’s Asian energy consulting business, led market research in Japan for RCM Capital Managment, and held a variety of domestic and international consulting positions with the economic forecasting and planning consulting firm Data Resources, Inc.

Risk Shift Creates Opportunities for FIs

Over the past few decades, economic, political and social changes have resulted in the shift of risk management responsibilities from institutions to individuals, a trend we are forecasting to become more acute over the next 10 years.

The biggest driver of this shift is the changing nature of work. Lifetime employment – and the retirement, health care and career planning benefits that once came with it – are no longer the norm. For example, according to the Bureau of Labor Statistics, only 28 percent of Americans, and less than 20 percent of Americans working in private industry, participate in a traditional defined benefit pension plan.

In addition to the decline in corporate benefits, support services from federal, state and local governments are also being reduced due to fiscal problems. The current policy debates in Washington and state capitols are not about whether or not to cut services, but instead how much to cut.

These shifts are resulting in an increased burden of responsibility for both individuals and families in all aspects of personal financial management, including planning and decision making in the areas of education, retirement planning, health care and elder care.

While this shift in responsibility enhances individual choice and can be empowering, it also forces individuals and families to shoulder the burden of managing the risks and complexities of their financial lives. This is a time consuming task requiring discipline, skill and specialized knowledge.

Driven by the risk shift, individuals and families will turn to products, services and trusted advisors to help them anticipate and understand the implications of their financial decisions. Financial institutions are well positioned to provide individuals and families with their increasingly complex financial planning and risk management needs.

While all adults are facing the risk shift, baby boomers (born 1946 – 1964) in particular have a very complex set of planning needs. They are reaching traditional retirement age, but many are also financing their kids’ education and dealing with aging parents.  Gen Y (born 1980 to 2000) will also need help as they move from the relatively carefree spending days of the 20s to the more careful financial management years of middle-age.

The risk shift is a powerful trend that impacts almost everyone. It also creates new fee-based service and product opportunities for financial institutions that can effectively and efficiently help individuals and families navigate their increasingly complex financial lives.

For more information on this topic, you can view the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry over the next decade.

 

About Steve King:  Steve is a Partner at Emergent Research. His current research and consulting is focused on economic decentralization, the growth of small business and the future of work and workplaces. Steve has extensive consulting, marketing and general management experience with both large and small companies.  Steve is a senior fellow and board member at the Society For New Communications Research, a research affiliate at the Future of Work and an advisory board member at Pond Ventures.

About Carolyn Ockels:  Carolyn is the Managing Partner at Emergent Research.  Her current research and consulting is focused on economic decentralization, the growth of small business and Gen Y.  Carolyn has extensive consulting experience, and prior to Emergent Research managed Cambridge Energy Research’s Asian energy consulting business, led market research in Japan for RCM Capital Managment, and held a variety of domestic and international consulting positions with the economic forecasting and planning consulting firm Data Resources, Inc.

 

 

 

 

Intuit 2020: Future of Financial Services Twitter Town Hall

Last week, we posted a report compiled by Emergent Research and Intuit Financial Services which identifies and examines trends that will transform the financial services industry over the next decade. To accompany the release of the report, we’re hosting a Twitter Town Hall to discuss the findings and key trends that will shape the next decade of the banking industry.

We’d like to invite all our readers to tune into the conversation and participate:

What: Future of Financial Services Twitter Town Hall

When: Tuesday, April 19, 2011 at 1:00 pm PT/4:00 pm ET

Where: Go to www.tweetchat.com. Log in using your Twitter ID. Search for #b2020

Some topics the Town Hall will touch upon include the need for financial services to increase across all age groups and demographics; increased competition between financial institutions to serve small and mid-market businesses; cloud computing reshaping how value-added products and services are designed and delivered.

To download the full report, click here.

 

Infographic: The Future of Financial Services

Intuit 2020 Report: The Future of Financial Services

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry over the next decade.  These are:

1.  A New Playing Field for Financial Services: Regulatory pressures will increase and competition will grow from both traditional competitors and new entrants. These forces will lead financial institutions to explore new business models, collaboration and partnerships, and increased consolidation.

2.  Shifting Segments, Changing Markets: Consumer demand for financial services will increase across all age groups. The two largest contingents – aging baby boomers and GenYers – will demonstrate particularly acute shifts in their needs and types of products and services they purchase.

Competition to serve mid-market businesses will intensify, slimming financial institution margins.  However, the overall small business sector will continue expanding, with the total number of small and personal businesses increasing by more than 7 million over the next decade. Most of this growth will come from micro and personal businesses (less than $1 million in revenue) creating opportunities for financial institutions that can serve these firms efficiently.

3.  The New Customer Connection: Technology’s role in the customer experience will take center stage. With increased cost pressures and a growing demand for flexibility, accessibility and personalization, financial services organizations will accelerate their use of technology to meet customer needs.

Cloud computing platforms and applications will combine with advanced analytical tools, ever-larger data sets, and social and mobile computing to reshape the way the financial services industry designs and delivers value-added products and services to customers.

4.  Reputation and Relationships Rule: Institutions that use technology to serve up useful customer insights will win. Over the next decade, the financial service industry will shift its focus from transactions to customized value-added services.

Through a combination of both virtual and brick-and-mortar branches, banks will develop stronger, more personal relationships with businesses and consumers, helping them manage risk, build wealth, plan retirement and anticipate health care expenses.

Intuit 2020: The Future of Financial Services builds on the data, trends and forecasts in the Intuit 2020 report, which identifies 20 emerging trends and shifts that will shape business and society over the next decade.

As part of the research process, Intuit’s Financial Services division and Emergent Research conducted a series of interviews and forecast workshops with financial services professionals, academics, and industry analysts. These sessions helped identify the important trends and implications that will impact financial services over the next 10 years.

Click here to download the report.

About Steve King:  Steve is a Partner at Emergent Research. His current research and consulting is focused on economic decentralization, the growth of small business and the future of work and workplaces. Steve has extensive consulting, marketing and general management experience with both large and small companies.  Steve is a senior fellow and board member at the Society For New Communications Research, a research affiliate at the Future of Work and an advisory board member at Pond Ventures.

About Carolyn Ockels:  Carolyn is the Managing Partner at Emergent Research.  Her current research and consulting is focused on economic decentralization, the growth of small business and Gen Y.  Carolyn has extensive consulting experience, and prior to Emergent Research managed Cambridge Energy Research’s Asian energy consulting business, led market research in Japan for RCM Capital Managment, and held a variety of domestic and international consulting positions with the economic forecasting and planning consulting firm Data Resources, Inc.

A Look Into the Intuit 2020 Report: The Future of Financial Services

This report provides a view of the significant demographic, economic, social and technology trends and forces that will affect the financial services industry over the next decade.

The starting point for this forecast is the Intuit 2020 Report, released in October 2010, which identified 20 emerging trends and shifts that will shape business and society over the next decade.

To prepare this follow-up report, Intuit Financial Services and Emergent Research conducted a series of forecast workshops, exercises, and interviews with accounting professionals, academics, and industry analysts. These sessions identified the important trends and implications that will affect the financial services industry.

Check back on Monday, April 11th for more details and follow us @bankingdotcom and @financeworks.