10 Consumer Trends for Financial Services Providers in 2010 and Beyond

10 Consumer Trends for Financial Services Providers in 2010 and Beyond published by Datamonitor in March, 2010. This report consists of Pages: 59 and the price starts from US $ 4495.

Introduction

Abstract

Introduction

Datamonitor has highlighted 10 trends that will influence consumers and their attitudes to FS in 2010 and beyond. These trends are varied and wide reaching; some driven by the global economic crisis while others emerge from broader consumer trends motivated by technological developments and changing lifestyles.

Scope of this research

• The report is global in scope, highlighting the broad consumer trends that will influence the attitudes and behaviours of consumers towards FS in 2010
• Extensive secondary sources as well as primary data is used to analyse emerging trends in the context of existing industry strategies

Research and analysis highlights

The successful banks of 2010 will be those that effectively remove the stain of ' too big to fail' from their brand image. This is easier to accomplish for smaller, local banks that can more effectively convey a human face to the consumer.

Consumers are confused by the jargon that accompanies the purchasing of financial products and more than ever seek a clearer understanding of what they are truly signing up for when they commit.

The branches of the future will place more weight on the experiential aspect of the FS services. When a customer invests the time and effort involved in making a personal visit to the bank, the branch experience must justify their trouble.

Key reasons to purchase this research

• This report provides key insights on how best to position product propositions given the consumer trends emerging in 2010
• Primary and secondary data is used to profile how consumers are reacting as they emerge from the global economic crisis and contemplate the future
• The report provides examples of FS providers already attuned to emerging consumer trends, showcasing best practice

Table of Contents

OVERVIEW

• Catalyst
• Summary

EXECUTIVE SUMMARY

• 10 Trends Identified
  • TREND 1: ' Too big to fail' will drive consumers to the personal and the local
  • TREND 2: Simplicity and certainty will drive the product selections of consumers in 2010
  • TREND 3: Renewed focus on ethics, sustainability and social responsibility will permeate both choice of product and choice of institution
  • TREND 4: Consumers in 2010 will rely on the actions and advice of their peers when making financial decisions
  • TREND 5: Customers will look beyond price to find value
  • TREND 6: Trust and heritage will play an increasing role in brand choice
  • TREND 7: Service must be innovative and flawless
  • TREND 8: 2010 will see a return of the long-term perspective in consumers' FS choices
  • TREND 9: Consumers will drop vanilla products in their search for individualism
  • TREND 10: Consumers diverge in their desires: experiential banking for bespoke issues and efficient pragmatism in their day to day banking

10 CONSUMER TRENDS FOR FS PROVIDERS IN 2010 AND BEYOND

• Introduction
• TREND 1: ' Too big to fail' will drive consumers to the personal and local
  • (Untitled sub-section)
  • INSIGHT: The collapse of the ‘big bank' brand will lead to the rise of the local bank
  • INSIGHT: Larger banks can entertain a return to personal banking through treatment tailored to the individual

• TREND 2: Simplicity and certainty will drive the product selections of consumers in 2010
  • INSIGHT: Consumers covet stability and, without sufficient trust in the FS community, wish to know more about the products they are purchasing

• TREND 3: Renewed focus on ethics, sustainability and social responsibility will permeate both choice of product and choice of institution
  • INSIGHT: Consumer demand for ethical FS is looking set to blossom
  • INSIGHT: Consumers are looking for social empathy from their bank

• TREND 4: Consumers in 2010 will rely on the actions and advice of their peers when making financial decisions
  • INSIGHT: FS providers will realize the truth about the value of social media
  • INSIGHT: Consumers will look to their peer group for reassurance that they are making the right move

• TREND 5: Customers will look beyond price to find value
  • INSIGHT: Price is only one small part of the proposition: security, quality, brand loyalty and service must each be respected
  • INSIGHT: FS providers must find the ‘value sweet spot' in order to entice the 2010 consumer

• TREND 6: Trust and heritage will play an increasing role in brand choice
  • INSIGHT: FS brand image was damaged in 2009 as customers lost faith in the FS institution
  • INSIGHT: The importance of branding in FS should not be underestimated and will only intensify in 2010
  • INSIGHT: Messages generating reassurance will be embraced by a consumer seeking certainty

• TREND 7: Service must be innovative and flawless
  • INSIGHT: Financial services must provide the same core services but in a better way
  • INSIGHT: Banks have to distinguish themselves through consistently excellent delivery and problem solving, including technology-led enhancements

• TREND 8: 2010 will see a return of the long-term perspective in consumers' FS choices
  • INSIGHT: Financial and emotional factors caused consumers' myopia to intensify during the crisis
  • INSIGHT: As pressures begin to ease, consumers in 2010 will once again look to the bigger picture

• TREND 9: Consumers will drop vanilla products in their search for individualism
  • INSIGHT: Personalization in FS acts as an opportunity for consumers to streamline and refine their FS package
  • INSIGHT: Providers see personalization as a cost but it could be an opportunity for providers to be able to extract more wallet share

• TREND 10: Consumers diverge in their desires: experiential banking for bespoke issues and efficient pragmatism in their day to day banking
  • INSIGHT: The 2010 consumer is looking for an effective system to manage their finances with little fuss
  • INSIGHT: Consumers will desire more from the banking experience when they head in-branch, both from the branch experience and the higher-order services on offer

THE 10 TRENDS GOING FORWARD

• Big bank fears are a recessionary hangover but could be longer lasting if banks do not act
• Regulatory pressures and consumer preference could drive product simplicity into the medium term
• Socially responsible FS is an unavoidable consequence of a wider social transition
• Social media' s involvement in consumer behavior is only just beginning to realize its potential
• Value will remain the benchmark against which FS propositions are judged
• FS branding has risen in significance and will persist
• Delivery still remains to be defined
• The long-term perspective will be fleeting as government cuts damage the consumer wallet
• Personalization will pick up steam as business systems increase in sophistication
• Divergent banking is the future of customer relations with banks

APPENDIX

• Methodology
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Average response for trust in various types of FS institution, where 5 is high trust and 1 is low trust
• Table: FS brand value collapsed in 2009 and must be rebuilt in 2010

FIGURES

• Figure: 10 consumer trends for FS providers
• Figure: Consumers are put off by the Big Bank brand
• Figure: Community banks marketing their personal relationships look to re-engage the jaded consumer
• Figure: The vision of customer relationship management is not being fulfilled
• Figure: Simplicity of product and clarity of information will appeal to the recovering consumer
• Figure: Consumers are grossly uninformed when it comes to important financial variables
• Figure: Although the financial world in general has failed to inspire consumers interests, consumers are paying more attention to banking literature than before the downturn
• Figure: Consumers are no longer passive about their finances; they are very conscious of their importance and as such will devote time to their analysis
• Figure: Virgin Money is approaching the market with ease and simplicity as a central part of its offering
• Figure: Canadian bank Presidents Choice Financial showcases its products with brevity and uses language that the consumer understands
• Figure: Social responsibility and an ethical outlook are becoming increasingly important in FS
• Figure: Brazilian, Indian and Chinese consumers are embracing ethical/green credentials
• Figure: The Co-operative Bank has gained favor through its socially responsible outlook
• Figure: Digital networks will form a social community that FS institutions would be foolish to ignore
• Figure: Our digital networks are now bigger than our physical ones
• Figure: FS providers hold false beliefs about the value of social media but these will change in 2010
• Figure: Social media can boost sales via a number of channels
• Figure: New tools offer consumers easy ways to compare their financial decision-making against that of their peers
• Figure: Blippy allows Twitter users to review the spending of their peers
• Figure: Value will stay centre stage in 2010
• Figure: Consumers are looking for more than price in 2010
• Figure: FS branding will be essential to attracting consumers in 2010
• Figure: First Direct provides peace of mind to the consumer through a transparent feedback system
• Figure: C. Hoare & Co effectively emphasizes its heritage, conveying the Megatrend of Authenticity
• Figure: Changing technologies will make flawless delivery essential
• Figure: Barclays PINsentry fails to reach a balance between security and ease of delivery
• Figure: Consumers will use the recovery to take stock of their long term goals
• Figure: Consumers will seek out the ability to pick and choose services and packages that meet their specific needs
• Figure: ZYNC from American Express provides an example of customers being allowed to mold FS products to their needs
• Figure: Experiential branch experience will play an important role in a developed proposition
• Figure: Consumers highlight in-branch preference as one of the main reasons for not using online banking
• Figure: Barclays' online banking marketing focuses on the ease of control
• Figure: Mint offers efficient and encompassing banking services
• Figure: Citibank' s vision of branches of the future
• Figure: Italian Bank Che Banca creates a destination out of bank branches
• Figure: Banks must move their in branch service up in the experience stakes
• Figure: Although all significant in 2010 each trend will vary in its long-term impact

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