Research Reveals Consumer Needs for Banking Advice

Research Reveals Consumer Needs for Banking Advice

Financial Advice

The COVID-19 pandemic continues to pose serious health concerns. At the same time, its impact on our economy is also taking a toll on consumers. We’ve been monitoring how consumers are dealing with the impact of the health crisis on their financial well-being and what it means for the banking industry. Our syndicated tracking research reveals specific point-in-time consumer needs for banking advice with many consumers showing concern about their current financial situation. Some of them are putting planned purchases on hold or thinking twice about investing while others are already dealing with financial hardships. These troubling situations give banks an opportunity to step up and offer customers much needed financial advice. It’s a win-win proposition. Customers get information they can use right now, and banks get the chance to expand product use among existing customers and build brand loyalty.  Banks can also use this as an opportunity to provide a point of differentiation in marketing and advertising campaigns targeting new customers.

Timely Needs for Banking Advice

We asked consumers to tell us how financially prepared they feel over the next few months. Not surprisingly, a quarter told us they’re facing financial hardship and almost half feel somewhat unprepared for the future.

Consumers’ Financial Concerns

25%

facing financial hardship

45%

feeling somewhat financially unprepared

25%

facing financial hardship

45%

feeling somewhat financially unprepared

We’re also seeing consumers put bigger financial plans on hold like buying a car or a new home. Even certain banking decisions are giving consumers pause. Some are holding off on opening a savings account with higher interest rates, while others are hesitant to invest in a CD. These types of banking transactions could actually improve someone’s long-term financial position, yet sadly, they are being delayed.

Due to the high level of uncertainty about their future, many consumers are unsure what to do next as they rethink financial goals. By learning what customers need most at this point in time, banks can play a critical role providing not only financial advice, but also offering services and resources tailored to meet customer needs.

Consumers Are Open to Banking Advice

Many consumers (84%) are open to receiving advice from their bank with particular interest in the following topics.

Interest in Financial Advice from Banks

47%

starting to save or saving more

42%

creating or sticking to a budget

40%

setting up digital alerts or notifications to help manage finances (low balance alerts, due-date notices, above-average spending in a category)

38%

planning for unexpected life events (illness, injury, loss of job)

37%

product & service recommendations that best fit your financial situation

36%

investing your money

35%

paying off or consolidating your debt

33%

information to help track your spending (by category, compared to prior months)

Banks have the ability and resources to help customers make smart, step-by-step changes to boost their financial position. Some ways to add value include helping set up digital alerts or sharing tips on tracking spending habits. Plus, banks can benefit as well by meeting simple, yet timely needs. Tools like these can go a long way to enhance overall customer experience and increase brand loyalty.

Digital is Key in Delivering Financial Information

Delivering information in the right way is just as important as the guidance itself. Consumers told us they prefer digital channels for receiving financial advice. Almost half (45%) prefer to get information via email, followed by banking websites (20%), and mobile apps (9%).

At the same time, digital banking tools are playing a bigger role for consumers. For example, just over one-fourth are using digital tools for the first time. That includes signing up for online banking, using mobile check deposit, or setting up online payments. It’s likely that many consumers will keep using these tools even after the health crisis has passed.

Digital Tools Offering Financial Guidance

Ally Bank

Ally Bank’s Savings Buckets helps customers visualize their progress against multiple savings goals by allocating savings into different categories, all within the same savings account.

Huntington

Huntington’s Heads Up app sends customers alerts on savings goals, automatic cash flow updates (like duplicate charges or refund notices), and monitors subscription transactions to help customers make more informed decisions in real-time.

Homing in on Gen Z

While people of all ages are interested and in need of financial advice during these turbulent times, Gen Z appears to stand out compared to some older consumers. Our research shows that Gen Z banking customers (those 18-24 years of age) are more likely to be facing a financial hardship (42%) than Gen X, Baby Boomers, or Silent Generation. They’re also more likely to feel somewhat financially unprepared for the future (64%). Their openness to receiving financial advice from banks is nearly universal (94%), with their highest interest in the areas of:

  • Tracking spending (57%)
  • Starting to save or saving more (54%)
  • Creating or sticking to a budget (53%)

According to Jason Dorsey, President of the Center for Generational Kinetics, “This is the generation-defining moment for Gen Z. What 9/11 was for Millennials, the COVID-19 pandemic will be for Gen Z.” Efforts the industry makes to meet Gen Z’s critical banking needs now will lay the foundation for strong customer relationships in the long run.

Enabling Financial Health – Banking’s Evolving Role

Adjusting to life in this era of Coronavirus will likely continue for some time, and companies that help customers adapt to new behaviors while offering useful advice stand to improve brand relationships. Banks, in particular, have an opportunity to deliver real value during these challenging times, beyond transactional experiences. The key is to act now by learning what customers need most and providing them with relevant information, services and resources. That’s how banks and customers can both come out ahead, paving the way to better financial health.

 

Research Methodology
The Dieringer Research Group, Inc. (The DRG), conducted a nationwide, syndicated online survey among 501 consumers using an online panel. Data collection for Wave I took place April 15 – 17, 2020, and Wave II between June 9-10, 2020. To qualify for the study, participants needed to be 18 years of age or older, either the primary or shared financial decision maker in their household, and currently have either a checking or savings account. We weighted the resulting data to the U.S. Census for the banked population by age, income, ethnicity, gender, region, and education.

CLICK HERE TO VIEW THE WAVE II RESULTS FROM OUR BANKING SYNDICATED STUDY