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Retail Banking and Credit Unions - US - February 2016

Published By :

Mintel

Published Date : Feb 2016

Category :

Banking

No. of Pages : N/A

The movement of the retail banking industry toward a more mobile experience provides financial institutions with a tremendous opportunity to establish new relationships and deepen engagement with current customers.

Table of Content

Overview

What you need to know
Definition

Executive Summary

The issues
Large banks dominate and deposits at commercial banks are growing
Figure 1: Domestic deposits of FDIC-insured commercial banks and savings institutions, 2007-14
Mobile banking is growing
Figure 2: How banking transactions are conducted, all, December 2013 versus August 2015
Lack of trust over security concerns stains landscape
Figure 3: Banking attitudes and behaviors, all, December 2015
The opportunities
Opportunities available to increase mobile banking adoption via security emphasis
Figure 4: Mobile banking usage, all, December 2015
Opportunity to meet the needs of many unsatisfied mobile banking consumers
Figure 5: Mobile banking preferences, all, December 2015
Financial institutions can encourage interaction in every channel based on service
Figure 6: How banking transactions are conducted, all, December 2015
What it means

The Market – What You Need to Know

Deposits at commercial banks over $10 trillion
US personal savings rate slowly increases
The economy remains strong
Fed interest rate hike and savings rates
Smartphone and tablet sales rise

Market Size and Forecast

Number of banks and credit unions continues to fall
Figure 7: Number of FDIC-Insured banks and credit unions, 1996-2014
Assets at commercial banks climb
Figure 8: Assets of FDIC-insured commercial banks and savings institutions, 2007-14
Deposits at commercial banks strong
Figure 9: Domestic deposits of FDIC-insured commercial banks and savings institutions, 2007-14
Asset growth at credit unions tops 30%
Figure 10: Total assets at US credit unions, 2009-15

Market Factors

US personal savings rate slowly increases
Figure 11: Personal savings rate, 2008-15
The economy remains strong
Figure 12: Percentage change from preceding period in GDP (Q1 2013-Q3 2015)
Fed interest rate hike and savings rates
Figure 13: Effective federal funds rate, 1990-2015
Smartphone and tablet sales rise
Figure 14: Total US unit smartphone sales, 2009-19
Figure 15: Total US sales of tablets, at current prices, 2010-15

Key Players – What You Need to Know

Mobile banking is growing
Need to address security concerns
First hike interest rate in nine years alters banking landscape

What’s Working?

Mobile banking is growing
Figure 16: How banking transactions are conducted, all, December 2013 versus August 2015

What’s Struggling?

Security concerns have many nervous
Figure 17: Banking attitudes and behaviors, all, December 2015
Figure 18: BMO Harris Bank email, 2015
Figure 19: Chase mobile ad, 2015
Figure 20: Bank of America email, 2015

What’s Next?

First interest rate hike in nine years alters banking landscape
Figure 21: Synchrony Bank print ad, 2016
Figure 22: Capital One email ad, 2016
Figure 23: Effective federal funds rate, 1990-2015
Wells Fargo testing voice recognition and biometrics

The Consumer – What You Need to Know

Large banks dominate
Free checking and convenience essential features for consumers
Mobile banking essential for Millennials and Hispanics
Four of 10 yet to adopt mobile banking
Opportunity for more satisfying mobile experience
Lack of trust and security concerns present barrier for many
Banking interactions determined by type of transaction
Consumers concerned about security

Account Ownership

Checking account ownership universal
Figure 24: Account ownership, all, December 2015
Men more likely to own investment accounts
Figure 25: Account ownership, by gender, December 2015
Variety of accounts used increases with wealth
Figure 26: Account ownership, by household income, December 2015
Black consumers underserved in investment, mortgage accounts
Figure 27: Account ownership, race/Hispanic origin, December 2015

Location of Primary Account

Large banks dominate
Figure 28: Location of primary account, all, December 2015
Credit union client base skews younger
Figure 29: Location of primary account, credit union ownership, by age group, December 2015
Millennials using large banks for investment accounts
Figure 30: Location of investment account, by generation, December 2015
More affluent consumers using internet-only banks
Figure 31: Location of any account, by household income, December 2015
Parents using online and alternative banks
Figure 32: Location of any account, by presence of children, December 2015
Hispanics twice as likely to use alternative bank
Figure 33: Location of any account, by race/Hispanic origin, December 2015

Essential Banking Features

Free checking and convenience essential feature for consumers
Figure 34: Essential banking features, all, December 2015
Mobile banking essential for Millennials
Figure 35: Essential banking features, by generation, December 2015
Online banking most popular among more affluent
Figure 36: Essential banking features, by household income, December 2015
Hispanics most likely to use mobile banking
Figure 37: Essential banking features, by race/Hispanic origin, December 2015

Mobile Banking Usage

Four of 10 yet to adopt mobile banking
Figure 38: Mobile banking usage, all, December 2015
Large national bank customers lead in mobile banking usage
Figure 39: Mobile banking usage, by primary account location, December 2015
Millennials using mobile banking apps
Figure 40: Mobile banking usage, all, December 2015
Parents nearly twice as likely to use mobile banking
Figure 41: Mobile banking usage, by presence of children, December 2015
Three-quarters of Hispanics banking mobile
Figure 42: Mobile banking usage, by race/Hispanic origin, December 2015

Mobile Banking Preferences

More are banking mobile, still room for improvement
Figure 43: Mobile banking preferences, all, December 2015
Young women frequent mobile banking users
Figure 44: Mobile banking preferences, by gender and age, December 2015
Parents prefer phone/tablet to computer
Figure 45: Mobile banking preferences, by presence of children, December 2015
Hispanics opening accounts on mobile devices
Figure 46: Mobile banking preferences, all, December 2015

Reasons for Not Using Mobile Devices

Lack of trust and security concerns present barrier for many
Figure 47: Reasons for not using mobile devices, all, December 2015
Younger customers more trusting of digital security
Figure 48: Reasons for not using mobile devices, all, December 2015
Security of greater concern among more affluent
Figure 49: Reasons for not using mobile devices, all, December 2015
Hispanics agree mobile banking valuable, but seek repeated use
Figure 50: Reasons for not using mobile devices, by race/Hispanic origin, December 2015

How Banking Transactions Are Conducted

Banking interactions determined by type of transaction
Figure 51: How banking transactions are conducted, all, December 2015
Checking account balances most likely action on mobile device
Figure 52: How banking transactions are conducted, all, December 2015
Small community banks succeed with newer mobile transactions
Figure 53: How banking transactions are conducted, Any mobile devices, December 2015
Hispanics far more likely to transfer money via mobile device
Figure 54: How banking transactions are conducted, any mobile devices, December 2015

Banking Attitudes and Behaviors

Room for improvement on trust and service
Figure 55: Banking attitudes and behaviors, all, December 2015
Credit Union customers trust their institution
Figure 56: Banking attitudes and behaviors, credit unions versus all, December 2015
Young men least trusting of financial institutions
Figure 57: Banking attitudes and behaviors, all, December 2015
Opportunity for financial advisory services for $75K-99K group
Figure 58: Banking attitudes and behaviors, by household income, December 2015
Small banks and credit unions compete on service
Figure 59: Banking attitudes and behaviors, by household income, December 2015
Hispanics looking to consolidate accounts
Figure 60: Banking attitudes and behaviors, by race/Hispanic origin, December 2015

Appendix – Data Sources and Abbreviations

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

List of Table

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