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Retail Banking and Credit Unions - US - February 2015

Published By :

Mintel

Published Date : Feb 2015

Category :

Banking

No. of Pages : 220 Pages

The banking industry is becoming increasingly competitive and new entrants into the market are largely technologically-based alternatives. Millennials are the prime target of these upstart companies, as well as everyone else, and the country’s changing demographics are providing a growing new group of customers.”
Table of Content

Scope and Themes

What you need to know
Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms

Executive Summary

The number of banks and credit unions is falling, but assets are rising
The strengthening economy will bolster the industry
The industries are highly concentrated
The competition is raging
Large banks reign
Millennials get mortgages at community banks
Young investors prefer large banks
Customers are satisfied with bank products, not so much advice
Trust is returning, but slowly and primarily among young people
Consumers want advice
Why do people switch?
Fees and convenience are the biggest reasons for switching
What we think

Issues and Implications

How can banks finally eliminate the trust issue?
Issues
Implications
What is next for credit unions?
Issues
Figure 1: Percentage of respondents who have primary accounts at credit unions, December 2013, November 2014
Implications

Trend Application

Inspire Trend: Data Creators
Inspire Trend: Cam Cam
Inspire Trend: Life Hacking

Market Size

Key points
The number of banks and credit unions continues to fall
Figure 2: Number of FDIC-insured banks and credit unions, 1995-2014*
Figure 3: Assets of FDIC-insured commercial banks and savings institutions, year-end, 2005-14*
Figure 4: Domestic deposits of FDIC-insured commercial banks and savings institutions, year-end, 2005-14*
The number of credit unions continues to fall, though members and assets increase
Figure 5: Credit unions numbers, members, and assets, 2004-13

Market Drivers

Key points
The economy is strengthening
Figure 6: Percentage change from preceding period in GDP (Q1 2012 – Q3 2014)
Figure 7: US unemployment rate January 2012 – December 2014
Sales of mobile devices
Figure 8: Total US unit smartphone sales, 2010-18 (forecast)
Figure 9: Total US unit tablet sales, 2010-18 (forecast)
Use of smartphones for banking
Figure 10: Banking transactions conducted via smartphone, November 2013 versus December 2014
Use of tablets for banking
Figure 11: Banking transactions conducted via tablet, November 2013 versus December 2014

Competitive Context

Key points
Largest retail banks
Figure 12: Largest US banks, measured by assets (Dec. 31, 2013, Dec. 31, 2014)
Largest credit unions
Figure 13: Largest US credit unions, measured by assets, Dec. 31, 2013-Sept. 30, 2014
Competition from all sides
Figure 14: Change in use of internet-only and alternative banks for primary checking account, 2013-14
Customer satisfaction is higher…or is it?
Electronic banking helps decrease switching
Figure 15: Reasons for switching banks in previous five years, 2013 versus 2014
Leading companies
JPMorgan Chase
Bank of America
Wells Fargo
Ally Bank
Capital One 360
Figure 16: Capital One 360 Café direct mail ad, 2014
Figure 17: Capital One 360 Café direct mail ad, 2014 (continued)
Figure 18: Capital One 360 Café online ad, 2014
Simple
Navy Federal Credit Union

Innovations and Innovators

Key points
Gamification of savings
BankMobile – Direct bank, no fees
Finally – Smart ATMs
Figure 19: Regions Bank smart ATM email ad, 2014
Figure 20: Fifth Third smart ATM direct mail incentive ad, 2014
Help for the unbanked

Marketing Strategies

Key points
Mailing activity
Email acquisition efforts
Figure 21: Acquisition email by product, Q3 2013-Q3 2014
The marketing advantage of bank branches
Figure 22: Conduct transactions at a bank/credit union branch, 2013 versus 2014
Incentives are still popular
Figure 23: Chase checking account incentive direct mail ad, 2015
Figure 24: Chase checking account incentive direct mail ad, 2015 (continued)
Figure 25: Fifth Third checking account incentive direct mail ad, 2014
Figure 26: Fifth Third checking account incentive direct mail ad, 2014 (continued)
Figure 27: Key Bank checking account incentive mobile ad, 2014
The launch of Apple Pay
Figure 28: M&T Bank Apple Pay email ad, 2014
Figure 29: Capital One Apple Pay email, 2014
Wells Fargo’s Apple Pay promotion
Figure 30: Wells Fargo Apple Pay email, 2014
Capital One 360
Figure 31: Capital One 360 Café online ad, 2014
Figure 32: Capital One 360 checking account online ad, 2014
Figure 33: Cap One 360 branding online ad, 2014
Figure 34: Cap One 360 branding online ad, 2014 (continued)
Online banking functions
Wells Fargo
Figure 35: Wells Fargo SurePay email ad, 2014
Bank of the West
Figure 36: Bank of the West mobile banking email ad, 2014
Figure 37: Chase mobile banking email ad, 2014

Social Media

Key points
Market overview
Key social media metrics
Figure 38: Key performance indicators, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015
Brand usage and awareness
Figure 39: Brand usage and awareness of retail banking and credit union brands, November 2014
Interaction with brands
Figure 40: Interaction with retail banking and credit union brands, November 2014
Leading online campaigns
Continuing the conversation online
“Community hero” contest
Hashtag photo contest
What we think
Online conversations
Figure 41: Online mentions, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015
What are people talking about online?
Figure 42: Mentions by topic of conversation, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015

Account/Product Ownership

Key points
Men have a greater variety of accounts and products
Figure 43: Ownership of financial accounts/products, by gender, November 2014
Opportunity among Millennials
Figure 44: Ownership of financial accounts/products, by generations, November 2014
Single people offer opportunity
Figure 45: Ownership of financial accounts/products, by marital/relationship status, November 2014
Mobile device owners are more likely to be customers
Figure 46: Ownership of financial accounts/products, by mobile device ownership, November 2014

Location of Primary Account

Key points
Large banks reign
Figure 47: Location of primary account, November 2014
Checking accounts
Women prefer small banks
Figure 48: Type of institution where primary checking account is held, by gender, November 2014
Savings accounts
Credit unions are more popular among women savers
Figure 49: Type of institution where primary savings account is held, by gender, November 2014
Residential mortgages
Small community banks attract Millennials
Figure 50: Type of institution where primary residential mortgage is held, by age, November 2014
Investment accounts
Large banks attract young investors
Figure 51: Four most popular types of institution where primary investment account is held, by age, November 2014*

Attitudes toward Banks and Credit Unions

Key points
Customer satisfaction
Older customers are most satisfied with products and services
Figure 52: Customer satisfaction with banks/credit unions, by age, November 2014
Trust
Women are more concerned than men
Figure 53: Trust in banks and credit unions, by gender, November 2014
Young people have regained trust
Figure 54: Trust in banks and credit unions, by age, November 2014
Attitude toward banks/credit unions and communications
More education is needed
Figure 55: Attitude toward institutions and communications, by age, November 2014

How Banking is Conducted

Key points
Different channels for different transactions
Figure 56: How banking is conducted, November 2014
Men use online banking far more than women
Figure 57: Transactions conducted on desktop/laptop, by gender, December 2014
Computers generally favored among older customers
Figure 58: Transactions conducted on desktop/laptop, by generation, November 2013-December 2014
Smartphones
Men are more comfortable than women with mobile banking
Figure 59: Transactions conducted on smartphone, by gender, November 2014
Millennials are leading the mobile charge
Figure 60: Transactions conducted on smartphone, by generation, November 2014
Having young children increases banking by smartphone
Figure 61: Transactions conducted on smartphone, by presence of children under age 18 in household, November 2014
Tablets
Men are more likely to bank via their tablet
Figure 62: Transactions conducted on tablet, by gender, November 2014
Use of tablets doesn’t differ much among generations
Figure 63: Transactions conducted on tablet, by generation, November 2014
Branches
Women are more likely than men to go to branches
Figure 64: Transactions conducted in a branch, by gender, November 2014
Figure 65: Transactions conducted in a branch, by gender, November 2014
Institutions need to promote mobile banking to those who have mobile devices
Figure 66: Transactions conducted in a branch, by mobile device ownership, November 2014

Interest in Products and Services

Key points
Secure credit cards and financial advice are most desired
Figure 67: Interest in banking products and services, November 2014
Already use
Men are more likely to use a variety of products and services
Figure 68: Products/Services already use, by gender, November 2014
Millennials are early adopters
Figure 69: Products/Services already use, by generations, November 2014
Bank alternatives are more popular among Hispanics
Figure 70: Products/Services already use, by Hispanic origin, November 2014
Urban dwellers are more engaged with financial products
Figure 71: Products/Services already use, by area, November 2014
High-income earners like online banks
Figure 72: Products/Services already use, by household income, November 2014
Don’t use but would be interested in using
Chip and PIN cards top the list
Figure 73: Products/Services not used, but would be interested in using, by gender, November 2014
Millennial women want advice
Figure 74: Products/Services not used, but would be interested in using, by gender and age, November 2014
Swing Generation is not really interested
Figure 75: Products/Services not used, but would be interested in using, by generations, November 2014
Banks need to target Hispanics
Figure 76: Products/Services not used, but would be interested in using, by Hispanic origin, November 2014

Switching Considerations

Key points
Women are more loyal bank customers
Figure 77: Switching considerations, by gender, November 2014
Millennials may need to be courted
Figure 78: Switching behavior, by generation, November, 2014
Credit union customers are the most loyal
Figure 79: Switching behavior, by type of bank/credit union used, November, 2014

Reason for Switching

Key points
Electronic banking has kept some from switching
Figure 80: Reasons for switching, November 2014

Appendix: Other Useful Consumer Tables

Account/product Ownership
Figure 81: Ownership of financial accounts/products, by age, November 2014
Figure 82: Ownership of financial accounts/products, by household income, November 2014
Figure 83: Ownership of financial accounts/products, by race/Hispanic origin, November 2014
Figure 84: Ownership of financial accounts/products, by mobile device ownership, November 2014
Figure 85: Ownership of financial accounts/products, by smartphone ownership, November 2014
Figure 86: Ownership of financial accounts/products, by tablet ownership, November 2014
Location of primary account
Checking accounts
Figure 87: Location of primary account, November 2014
Figure 88: Type of institution where primary checking account is held, by gender, November 2014
Figure 89: Type of institution where primary checking account is held, by age, November 2014
Figure 90: Type of institution where primary checking account is held, by generations, November 2014
Figure 91: Type of institution where primary checking account is held, by household income, November 2014
Savings accounts
Figure 92: Type of institution where primary savings account is held, by gender, November 2014
Figure 93: Type of institution where primary savings account is held, by age, November 2014
Figure 94: Type of institution where primary savings account is held, by generations, November 2014
Figure 95: Type of institution where primary savings account is held, by household income, November 2014
Residential mortgages
Figure 96: Type of institution where primary residential mortgage is held, by gender, November 2014
Figure 97: Type of institution where primary residential mortgage is held, by generations, November 2014
Figure 98: Type of institution where primary residential mortgage is held, by household income, November 2014
Investment accounts
Figure 99: Four most popular types of institution where investment account is held, by gender, November 2014
Figure 100: Type of institution where investment account is held, by household income, November 2014
Attitudes toward banks and credit unions
Figure 101: Attitude toward banks and credit unions, by gender, November 2014
Figure 102: Attitude toward banks and credit unions, by age, November 2014
Figure 103: Attitudes toward banks and credit unions, by generations, November 2014
Figure 104: Attitudes toward banks and credit unions, by household income, November 2014
How banking is conducted
Desktop/laptop
Figure 105: Transactions conducted on desktop/laptop, by age, November 2014
Figure 106: Transactions conducted on desktop/laptop, by gender and age, November 2014
Figure 107: Transactions conducted on desktop/laptop, by household income, November 2014
Figure 108: Transactions conducted on desktop/laptop, by mobile device ownership, November 2014
Smartphone
Figure 109: Transactions conducted on smartphone, by age, November 2014
Figure 110: Transactions conducted on smartphone, by household income, November 2014
Tablets
Figure 111: Transactions conducted on tablet, by age, November 2014
Figure 112: Transactions conducted on tablet, by household income, November 2014
Branches
Figure 113: Transactions conducted in branch, by age, November 2014
Figure 114: Transactions conducted in branch, by household income, November 2014
ATMs
Figure 115: Transactions conducted on ATM, by gender, November 2014
Figure 116: Transactions conducted on ATM, by age, November 2014
Figure 117: Transactions conducted on ATM, by household income, November 2014
Interest in product and services
Already use
Figure 118: Products/Services already use, by age, November 2014
Figure 119: Products/Services already use, by region, November 2014
Figure 120: Products/Services already use, by mobile device ownership, November 2014
Don’t use but would be interested in using
Figure 121: Products/Services not used, but would be interested in using, by age, November 2014
Figure 122: Products/Services not used, but would be interested in using, by household income, November 2014
Figure 123: Products/Services not used, but would be interested in using, by mobile device ownership, November 2014
Figure 124: Products/Services not used, but would be interested in using, by smartphone ownership, November 2014
Figure 125: Products/Services not used, but would be interested in using, by tablet ownership, November 2014
Any interest
Figure 126: Products/Services interested in using, any interest, by gender, November 2014
Figure 127: Products/Services interested in using, by age, November 2014
Figure 128: Products/Services interested in using, by generations, November 2014
Figure 129: Products/Services interested in using, by household income, November 2014
Switching behavior
Figure 130: Switching considerations, by age, November 2014
Figure 131: Switching considerations, by household income, November 2014
Figure 132: Switching considerations, by mobile device ownership, November 2014

Appendix: Social Media

Key brand metrics
Figure 133: Key social media indicators of selected retail banking and credit union brands, January 2015
Online conversations
Figure 134: Online mentions, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015
Brand usage or awareness
Figure 135: Brand usage or awareness, October 2014
Figure 136: Chase usage or awareness, by demographics, October 2014
Figure 137: Wells Fargo usage or awareness, by demographics, October 2014
Figure 138: Capital One 360 usage or awareness, by demographics, October 2014
Figure 139: Ally Bank usage or awareness, by demographics, October 2014
Figure 140: USAA usage or awareness, by demographics, October 2014
Figure 141: Navy Federal Credit Union usage or awareness, by demographics, October 2014
Activities Done
Figure 142: Activities done, October 2014
Figure 143: Chase – Activities done – I have looked up/talked about this brand online on social media…, by demographics, October 2014
Figure 144: Chase – Activities done – I have contacted/interacted with the brand online on social media to…, by demographics, October 2014
Figure 145: Chase – Activities done – I follow/like the brand on social media because…, by demographics, October 2014
Figure 146: Chase – Activities done – I have researched the brand on social media to…, by demographics, October 2014
Figure 147: Wells Fargo – Activities done – I have looked up/talked about this brand online on social media…, by demographics, October 2014
Figure 148: Wells Fargo – Activities done – I have contacted/interacted with the brand online on social media to…, by demographics, October 2014
Figure 149: Wells Fargo – Activities done – I follow/like the brand on social media because…, by demographics, October 2014
Figure 150: Wells Fargo – Activities done – I have researched the brand on social media to…, by demographics, October 2014
Figure 151: Capital One 360 – Activities done – I have looked up/talked about this brand online on social media…, by demographics, October 2014
Figure 152: Capital One 360 – Activities done – I have contacted/interacted with the brand online on social media to…, by demographics, October 2014

Appendix: Trade Associations

American Bankers Association (ABA)
American Financial Services Association (AFSA)
Consumer Bankers Association (CBA)
Credit Union National Association
Independent Community Bankers of America (ICBA)
Mortgage Bankers Association (MBA)
National Credit Union Association (NCUA)

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