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Black Consumers and Money Management - US - May 2016

Published By :

Mintel

Published Date : May 2016

Category :

Banking

No. of Pages : N/A

Black consumers are eager for help and in need of money management services. Black consumers’ household structures, dynamics, and incomes differ from the total population, presenting them with specific challenges in managing their money.

Table of Content

Overview

What you need to know
Definition

Executive Summary

The issues
Blacks need help managing their money
Figure 1: Attitudes about saving/managing money and financial security, Blacks versus all, July 2014 -September 2015
Many forced to make cuts to meet expenses
Figure 2: Top ways Black manage unexpected expenses – Nets, December 2015
Significant issue of trust and fairness needs to be addressed
Figure 3: Attitudes around Black/African American treatment related to loans, December 2016
The opportunities
Better money management can help Blacks afford their desires
Figure 4: Financial trade-offs – First to be cut, December 2015
Credit card consolidation could provide easy first step
Figure 5: Attitudes toward credit and loans, December 2015
Smartphone apps and online tools can help younger Blacks engage
Figure 6: Smartphone app resources interested in using, by age, December 2015
Trust building starts by understanding Black consumers’ concerns
Figure 7: Attitudes toward retirement, December 2015
Young, upwardly mobile Blacks present opportunity as they move into peak-earning years
Figure 8: Managing unexpected expenses – Saving, by age. December 2015
What it means

The Market – What You Need to Know

Blacks need help managing their money
Blacks find interest in financial ads
Blacks’ median household income lags
Black households far more likely than Whites to be headed by women
Growth projected for 25-44-year-old Black population

Market Perspectives

Help wanted? Less than half are “very good” at managing money
Figure 9: Attitudes about saving/managing money and financial security, Blacks versus all, July 2014-September 2015
Blacks more interested in financial services ads, paying for services
Figure 10: Attitudes toward financial services ads and financial advice, Blacks versus all, July 2014 -September 2015

Market Factors

Mean income for Blacks lags behind Whites
Figure 11: Mean income before taxes, White and Black, 2009-2014
Black households far more likely than Whites to be headed by women
Figure 12: Family households with own children, by race and Hispanic origin of householder, by type, 2014
Figure 13: Attitudes toward money management, Black moms versus all, July 2014-September 2015
Growth projected for 25-44-year-old Black consumers
Figure 14: Black population, by age, 2011-21

Key Players – What You Need to Know

Black churches take on role of money management educator
Mobile banking sees slower adoption Black consumers
FSIs struggling to gain Black consumers’ trust
Cash becoming less essential form of payment

What’s Working?

Black churches take on role of money management educator
Financial industry begins to diversify advisor ranks

What’s Struggling?

Slow adoption rate of mobile banking among Black consumers
Figure 15: Mobile banking usage, by race/Hispanic origin, August 2015
Figure 16: Chase digital ad, 2015
Payday loans unpopular, providing discomfort
Figure 17: Attitudes toward payday loans, December 2016, April 2015
FSIs struggling to gain Black consumers’ trust
Figure 18: Banking and investment products currently owned, Black consumers indexed to all, October 2014-December 2015

What’s Next?

Cash becoming less essential form of payment
Figure 19: Attitudes toward paying in cash, July 2009-September 2015
Figure 20: ApplePay digital ad, 2015

The Consumer – What You Need to Know

Many Blacks forced to make cuts to meet expenses
Better money management can help Blacks afford their desires
Credit card consolidation could provide easy first step
Debt making many Black consumers uncomfortable
Trust in financial service providers is lacking
Smartphone apps and online tools can help younger Blacks engage
Opportunity for financial advisors to offer planning services
Lack of trust among Blacks needs to be addressed

Money Management Techniques

More effort spent shopping around than setting budgets
Figure 21: Money management techniques, December 2015
Black women shopping for best prices
Figure 22: Money management techniques – Related to shopping around and advisor use, by gender and age, December 2015
Older Black consumers, particularly women, cutting back
Figure 23: Money management techniques – Related to budgeting, by gender and age, December 2015
Younger Blacks trying to boost income and using public transportation
Figure 24: Money management techniques – Related to boosting income, by gender and age, December 2015

Managing Unexpected Expenses

Three quarters manage unexpected expenses by economizing
Figure 25: Managing unexpected expenses, December 2015
Older Black consumers more likely to economize
Figure 26: Managing unexpected expenses – Economizing, by age. December 2015
Younger Blacks present opportunity for savings accounts
Figure 27: Managing unexpected expenses – Saving, by age. December 2015
More affluent Blacks can improve money management techniques
Figure 28: Managing unexpected expenses – Economizing and paying late, by household income, December 2015

Financial Trade-offs

Leisure and entertainment first expenses trimmed
Figure 29: Financial trade-offs – First to be cut, December 2015
Figure 30: Financial trade-offs – Any rank, December 2015
25-34-year-olds engaging in dangerous credit card practices
Figure 31: Financial trade-offs – Leisure versus paying less on money owed, by age, December 2015
Black mothers sacrifice to put children first
Figure 32: Financial trade-offs, by gender and parent status, December 2015
Figure 33: Aggieland Credit Union, digital ad, 2016

Attitudes toward Debt and Credit Cards

Debt making many Black consumers uncomfortable
Figure 34: Attitudes toward debt, Black consumers indexed to all, December 2015, April 2015
Figure 35: Visa mobile ad, 2015
Young consumers present opportunity for “good debt”
Figure 36: Attitudes toward debt, by age, December 2015, April 2015
Figure 37: HomeTrust Bank mobile ad, 2016
Blacks less likely than all to pay with cash
Figure 38: Attitudes toward credit cards, Black consumers versus all, December 2015
More affluent Blacks understand rewards, but room for education
Figure 39: Attitudes toward credit cards, by household income, December 2015
Figure 40: BBVA Compass mobile ad, 2015
Opportunity to consolidate credit card balances
Figure 41: Attitudes toward credit and loans, December 2015
Younger Blacks willing to take on debt for better life and instant gratification
Figure 42: Attitudes toward credit and loans – Any agree, by age, December 2015
Debit cards to stay debt-free appealing to Black consumers
Figure 43: Debit card features using/interested in using, Black consumers indexed to all, December 2015, April 2015

Attitudes toward Loans

Trust and comfort issue for Black consumers considering loans from bank
Figure 44: Attitudes toward loans, Black consumers indexed to all, December 2015
Young Black men more comfortable borrowing money
Figure 45: Attitudes toward loans, by gender and age, December 2015
Most not comfortable with payday loans
Figure 46: Attitudes toward payday loans, December 2016, April 2015
Young Blacks far more likely to seek payday loan
Figure 47: Attitudes toward payday loans, by age, December 2016, April 2015

Interest in Online Resources, Smartphone Apps

Opportunity to draw in Black consumers with online tools
Figure 48: Online resources using/interested in using, Black consumers indexed to all, December 2015, April 2015
Online resources most attractive to young Blacks
Figure 49: Online resources interested in using, by age, December 2015
Smartphone apps also of interest
Figure 50: Smartphone app resources using/interested in using, Black consumers indexed to all, December 2015, April 2015
Smartphone apps can attract younger and middle-aged Blacks
Figure 51: Smartphone app resources interested in using, by age, December 2015

Attitudes toward Retirement

Half of Black consumers worried about retirement
Figure 52: Attitudes toward retirement, December 2015
Some anxiety increases as retirement nears
Figure 53: Attitudes toward retirement, by gender and by age, December 2015
Opportunity for financial advisors to offer planning services
Figure 54: Financial advisor using/interested in using, December 2015
Young Blacks best opportunity for financial advisors
Figure 55: Financial advisor interested in using, by age, December 2015

Trust and Confidence in Financial Services

Blacks optimistic, but financial providers need to develop trust
Figure 56: Trusts and confidence in finances and financial services, December 2015
Black men making financial improvements
Figure 57: Trusts and confidence in finances and financial services, by gender and age, December 2015
Issue of trust and fairness needs to be addressed
Figure 58: Attitudes around Black/African American treatment related to loans, December 2016
Signs improving for younger audience, yet work needs to be done
Figure 59: Attitudes around Black/African American treatment related to loans, December 2016

Appendix – Data Sources and Abbreviations

Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations

List of Table

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