Table of Contents
Introduction And Abbreviations
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- Introduction
- Scope of the Report
- Other Relevant Reports
- Definition
- Abbreviations & Terms
- Abbreviations
- Terms
Executive Summary
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- Overview
- The Convenience Factor
- Consumers Are Demanding More Choices
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- Figure 1: Attitudes towards banking convenience, by age, August 2004
- The next generation in Convenience Banking
- The Death of Branches Greatly Exaggerated
- Branches grow, for good reason
- Knowing the Customer
- Increased competition demands increased segmentation
- Appealing to Gen X
- Segmenting by Ethnicity
- Branching Out in Customer and Product Mix
- Targeting the unbanked
- Banker or financial adviser?
- The Future of Online Banking
Market Drivers
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- Consumers are Starting to Save at a Younger Age
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- Figure 2: U.S. population projections, by age, 2000-09
- Figure 3: Ownership of financial services products, 12th Grade high school students, 1997-2004
- The Appeal of the Generation X Market Affects the Way Retail Banks Market Themselves
- Generation X is Leading the Pack with Internet Banking
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- Figure 4: Internet as the preferred delivery channel for borrowing money from the bank, by age, August 2004
- The Other End of the Bell Curve: New Members of the Older Generation
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- Figure 5: AARP Generation, growing fast, 1997-2002
- Impact of Capital Market Movements on Product Mix
- The Perceived Need for Personal Contact Drives Branch Growth
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- Figure 6: Delivery channel preference for getting a mortgage, August 2004
- The Internet is Changing the Way Consumers Do Business
- Home Internet use and connections
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- Figure 7: U.S. residential Internet connections, 1997-2005
- Consumers Want Convenience
- ‘Round-the-Clock Service is the New Mantra
- More Working Mothers Means Less Time for the Bank
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- Figure 8: Consumers attitudes’ towards branch banking, by gender, August 2004
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- Figure 9: Young adults' online financial cctivities, by gender, 2003
- Figure 10: Financial products researched online by young adults aged 18-29, by gender, 2003
- Hispanic and Asian Markets on the Rise
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- Figure 11: Projected U.S. population growth, by ethnicity, 2004 and 2010
Market Size & Trends
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- Figure 12: Retail banking market size in current and constant prices, 1999-1Q2004
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- Figure 13: Changes in market size compared with per capita income and inflation, 1999-1Q2004
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Market Segmentation
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- Overview
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- Figure 14: Total market size, 2001-1Q2004
- Traditional Bank Products―Deposits
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- Figure 15: Market for traditional bank products, 1999-1Q2004
- Checkable Deposits
- Time and Savings Deposits
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- Figure 16: One-year certificate of deposit rates, 1999-1Q2004
- Money Market Funds
- Mortgages
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- Figure 17: Household and home mortgage liability growth, 1999-1Q2004
- Figure 18: 30-year fixed mortgage rates, 1999-1Q2004
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- Figure 19: Number of 1-4 family mortgage originations, 1999-2005
- Consumer Credit
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- Figure 20: Household consumer credit liability, 1999-1Q2004
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- Figure 21: Total revolving credit outstanding, 1999-Q22004
- Debit Cards
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- Figure 22: Debit card usage, 1992-2001
- Investment Products Including IRAs
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- Figure 23: IRA assets and share of total IRA assets, by institution, 1990-2003
Supply Structure
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- OVERVIEW AND COMPANY PROFILES
- Overview
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- Figure 24: Total deposits, by supplier, 2001-2Q2004
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- Figure 25: Supplier breakdown, by revenue, 2001-03
- Bank of America (merged with Fleet Boston 4/2004)
- Citibank (Citigroup)
- JPMorgan Chase (merged with Bank One 7/2004)
- SunTrust Banks, Inc.
- U.S. Bancorp (U.S. Bank)
- Wachovia
- Washington Mutual
- The evolution of the WaMu modern branch environment
- Wells Fargo
- Commerce Bank
- ING Bank
- MERGERS AND ACQUISITIONS
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- Graph 1: Reasons for customer dissatisfaction after a bank merger, 2004
- The Changing Face of the Super-regional Bank
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- Figure 26: Money center banks, 1994 and 2Q2004
- Figure 27: Regional banks, 1994 and 2Q2004
- Regional Market Share
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- Figure 28: California retail banking market share, by deposits, 2003
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- Figure 29: New York retail banking market share, by deposits, 2003
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- Figure 30: Florida retail banking market share, by deposits, 2003
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- Figure 31: Illinois retail banking market share, by deposits, 2003
- Figure 32: Texas retail banking market share, by deposits, 2003
Advertising & Promotion
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- OVERVIEW
- Bank and Financial Services Continue to Spend on Advertising
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- Figure 33: Top adspend growth categories, 1Q2003 and 1Q2004
- Graph 2: Bank marketing expenditures, 2002-04
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- Figure 34: Importance of different types of advertising media, 2002
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- Figure 35: Top five banks’ U.S. advertising expenditures, 2002 and 2003
- Ethnic Marketing
- COMPANY ACTIVITY
- Bank One
- Citigroup
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- Figure 36: Citigroup “live richly” advertisement, 2003
- Washington Mutual
- HSBC
Retail Distribution
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- Overview
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- Figure 37: Retail branches and ATMs compared with deposits, June 2004
- Branches Increase while Banking Organizations Decline
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- Figure 38: Commercial banking institutions and number of branches, 1984-2003
- Why the trend, and why the rush?
- Small Business Customers are Profitable and Frequent Branches Regularly
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- Figure 39: Retail banks offering small business loans, 10/2002 through 9/2003
- Not all parts of the country have seen increasing branches—Over Time
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- Figure 40: Change in number of branches in top ten states in terms of personal income, 1999 & 2Q2003
- Can the branching trend continue (and is it economic)?
- The Cross-sell
- Banks selling brokerage services through branches
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- Figure 41: Bank sales of mutual funds and annuities, 2003
- Supermarket branches: another way to reach the consumer
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- Figure 42: U.S. Supermarket branch leaders, 2004
- Branch Environment—Is it Making an Impact?
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- Figure 43: Picture of an Umpqua bank branch, 2004
- Branches: only a part of the picture
- ATMs More Important in Generating Loyalty than Revenue
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- Figure 44: Total U.S. ATMs and percent of off-branch ATMs, 2004
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- Figure 45: Households that are e-banking, by type of technology, 1995-2003
- Online Banking & Technology
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- Figure 46: Forecast of households who bank online and pay bills online, 2003-08
The Consumer
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- Introduction
- Overview
- Ownership of Deposit Products
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- Figure 47: Ownership of deposit products, by gender, 2003
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- Figure 48: Ownership of deposit products, by age, 2003
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- Figure 49: Ownership of deposit products, by race and ethnicity, 2003
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- Figure 50: Ownership of deposit products, by household income, 2003
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- Figure 51: Ownership of checking and savings account, by level of education, 2003
- The Loyalty Issue
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- Figure 52: Number of different institutions banked, by gender, August 2004
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- Figure 53: Number of different institutions banked, by age, August 2004
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- Figure 54: Number of different institutions banked, by race and ethnicity, August 2004
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- Figure 55: Number of different instituions banked, by household income, August 2004
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- Figure 56: Number of different institutions banked, be level of education, August 2004
- Loan product ownership
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- Figure 57: Ownership of loan products, by age, 2003
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- Figure 58: Ownership of loan products, by race and ethnicity, 2003
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- Figure 59: Ownership of loan products, by household income, 2003
- Attitudes towards branch banking
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- Figure 60: Attitudes towards banking convenience, by gender, August 2004
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- Figure 61: Attitudes towards banking convenience, by age, August 2004
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- Figure 62: Attitudes towards banking convenience, by race/ethnicity, August 2004
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- Figure 63: Attitudes towards convenience, by household income, August 2004
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- Figure 64: Attitudes towards convenience, by region, August 2004
- Location, Location, Location
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- Figure 65: Location of branch and ATM within 1 mile of work and home, by age, August 2004
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- Figure 66: Location of branch and ATM within 1 mile of work and home, by race/ethnicity, August 2004
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- Figure 67: Location of branch and ATM within 1 mile of work and home, by household income, August 2004
- Customer Service Check-Up
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- Figure 68: Attitudes towards customer service, by gender, August 2004
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- Figure 69: Attitudes towards customer service, by age, August 2004
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- Figure 70: Attitudes towards customer service, by race/ethnicity, August 2004
- Extending the relationship
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- Figure 71: Ownership of other products with primary bank, by gender, August 2004
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- Figure 72: Ownership of other products with primary bank, by age, August 2004
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- Figure 73: Ownership of other products with a bank, by race/ethnicity, August 2004
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- Figure 74: Ownership of other products with primary bank, by household income, August 2004
- Preferred methods of completing complex financial activities
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- Figure 75: Preference of conducting business for financial services activities, by gender, August 2004
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- Figure 76: Preference of conducting business for financial services activities, by age, August 2004
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- Figure 77: Preference of conducting business for financial services activities, by race/ethnicity, August 2004
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- Figure 78: Preference of conducting business for financial services activities, by household income, August 2004
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- Figure 79: Preference of conducting business for financial services activities, by region, August 2004
- Depositing and Borrowing Money
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- Figure 80: Preference of depositing and borrowing money, by age, August 2004
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- Figure 81: Preference of depositing and borrowing money, by household income, August 2004
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- Figure 82: Preference of depositing and borrowing money, by level of education, August 2004
Future & Forecast
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- FUTURE TRENDS
- Expected Development: Life Cycle Banking
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- Figure 83: Life stages and life events, Provident Bank of New Jersey
- Increased Product Offering to Meet Varying Needs
- Focus on the Ethnic Market
- Baby Boomers Will Have Unique Banking Needs
- Online Banking Becomes the Norm
- MARKET FORECAST
- Retail banking
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- Figure 84: Forecast of the total U.S. retail banking market size, at current and constant prices, 2004-09
- Home mortgages
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- Figure 85: Forecast of home mortgages at U.S. retail banks, at current and constant prices, 2004-09
- Time and savings deposits
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- Figure 86: Forecast of time and savings deposits at U.S. retail banks, at current and constant prices, 2004-09
- Consumer credit
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- Figure 87: Forecast of consumer credit at U.S. retail banks, at current and constant prices, 2004-09
- Money market funds
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- Figure 88: Forecast of money market funds at U.S. retail banks, at current and constant prices, 2004-09
- Checkable deposits
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- Figure 89: Forecast of checkable deposits at U.S. retail banks, at current and constant prices, 2004-09
- Forecast Factors
Appendix: Trade Associations
Appendix: Mailing Pieces And Print Advertisements
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- Free Small Business Checking from Compass Bank
- Free Senior Checking from First Federal Bank
- Orange Savings Account from ING Direct
- Wells Fargo Home Mortgage
- Notes on Comperemedia
- Direct Mail
- Direct Mail—Business-to-Business
- Print Advertising
Appendix: Regional Consumer Data
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- The Northeast Region
- The Loyalty Issue
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- Figure 90: Number of different instutions banked, by gender, August 2004
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- Figure 91: Number of different institutions banked, by age, August 2004
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- Figure 92: Number of different institutions banked, by race and ethnicity, August 2004
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- Figure 93: Number of different instituions banked, by household income, August 2004
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- Figure 94: Number of different instituions banked, be level of education, August 2004
- Attitudes towards branch banking
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- Figure 95: Attitudes around banking convenience, by gender, August 2004
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- Figure 96: Attitudes around banking convenience, by age, August 2004
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- Figure 97: Attitudes around banking convenience, by race/ethnicity, August 2004
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- Figure 98: Attitudes toward convenience, by household income, August 2004
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- Figure 99: Attitudes towards convenience, by level of education obtained, August 2004
- Location, Location, Location
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- Figure 100: Location of branch and ATM within 1 mile of work and home, by gender, August 2004
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- Figure 101: Location of branch and ATM within 1 mile of work and home, by age, August 2004
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- Figure 102: Location of branch and ATM within 1 mile of work and home, by race/ethnicity, August 2004
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- Figure 103: Location of branch and atm within 1 mile of work and home, by household income, August 2004
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- Figure 104: Location of branch and atm within 1 mile of work and home, by level of education, August 2004
- Customer Service Check-Up
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- Figure 105: Attitudes towards customer service, by gender, August 2004
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- Figure 106: Attitudes towards customer service, by age, August 2004
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- Figure 107: Attitudes towards customer service, by race/ethnicity, August 2004
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- Figure 108: Attitudes towards customer service, by household invome
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- Figure 109: Attitudes towards customer service, by education level, August 2004
- Extending the relationship
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- Figure 110: Ownership of other products with primary bank, by gender, August 2004
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- Figure 111: Ownership of other products with primary bank, by age, August 2004
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- Figure 112: Ownership of other products with a bank, by race/ethnicity, August 2004
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- Figure 113: ownership of other products with primary bank, by household income, August 2004
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- Figure 114: ownership of other products with primary bank, by level of education obtained
- Preferred methods of completing complex financial activities
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- Figure 115: Preference of conducting business for financial services activities, by gender, August 2004
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- Figure 116: Preference of conducting business for financial services activities, by age, August 2004
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- Figure 117: Preference of conducting business for financial services activities, by race/ethnecity, August 2004
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- Figure 118: Preference of conducting business for financial services activities, by household income, August 2004
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- Figure 119: Preference of conducting business for financial services activities, by education level, August 2004
- Depositing and Borrowing Money
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- Figure 120: Preference of depositing and borrowing money, by gender, August 2004
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- Figure 121: Preference of depositing and borrowing money, by age, August 2004
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- Figure 122: Preference of depositing and borrowing money, by race/ethnicity, August 2004
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- Figure 123: Preference of depositing and borrowing money, by household income, August 2004
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- Figure 124: Preference of depositing and borrowing money, by level of education, August 2004
- Midwest Region
- The Loyalty Issue
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- Figure 125: Number of different instutions banked, by gender, August 2004
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- Figure 126: Number of different institutions banked, by age, August 2004
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- Figure 127: Number of different institutions banked, by race and ethnicity, August 2004
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- Figure 128: Number of different instituions banked, by household income, August 2004
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- Figure 129: Number of different instituions banked, be level of education, August 2004
- Attitudes towards branch banking
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- Figure 130: Attitudes around banking convenience, by gender, August 2004
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- Figure 131: Attitudes around banking convenience, by age, August 2004
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- Figure 132: Attitudes around banking convenience, by race/ethnicity, August 2004
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- Figure 133: Attitudes toward convenience, by household income, August 2004
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- Figure 134: Attitudes towards convenience, by level of education obtained, August 2004
- Location, Location, Location
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- Figure 135: Location of branch and ATM within 1 mile of work and home, by gender, August 2004
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- Figure 136: Location of branch and ATM within 1 mile of work and home, by age, August 2004
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- Figure 137: Location of branch and atm within 1 mile of work and home, by race/ethnicity
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- Figure 138: Location of branch and ATM within 1 mile of work and home, by household income, August 2004
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- Figure 139: Location of branch and ATM within 1 mile of work and home, by level of education, August 2004
- Customer Service Check-Up
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- Figure 140: Attitudes towards customer service, by gender, August 2004
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- Figure 141: Attitudes towards customer service, by age, August 2004
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- Figure 142: Attitudes towards customer service, by race/ethnicity, August 2004
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- Figure 143: Attitudes towards customer service, by household invome
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- Figure 144: Attitudes towards customer service, by education level, August 2004
- Extending the relationship
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- Figure 145: Ownership of other products with primary bank, by gender, August 2004
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- Figure 146: Ownership of other products with primary bank, by age, August 2004
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- Figure 147: Ownership of other products with a bank, by race/ethnicity, August 2004
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- Figure 148: ownership of other products with primary bank, by household income, August 2004
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- Figure 149: ownership of other products with primary bank, by level of education obtained
- Preferred methods of completing complex financial activities
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- Figure 150: Preference of conducting business for financial services activities, by gender, August 2004
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- Figure 151: Preference of conducting business for financial services activities, by age, August 2004
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- Figure 152: Preference of conducting business for financial services activities, by race/ethnecity, August 2004
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- Figure 153: Preference of conducting business for financial services activities, by household income, August 2004
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- Figure 154: Preference of conducting business for financial services activities, by education level, August 2004
- Depositing and Borrowing Money
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- Figure 155: Preference of depositing and borrowing money, by gender, August 2004
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- Figure 156: Preference of depositing and borrowing money, by age, August 2004
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- Figure 157: Preference of depositing and borrowing money, by race/ethnicity, August 2004
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- Figure 158: Preference of depositing and borrowing money, by household income, August 2004
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- Figure 159: Preference of depositing and borrowing money, by level of education, August 2004
- West Region
- The Loyalty Issue
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- Figure 160: Number of different instutions banked, by gender, August 2004
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- Figure 161: Number of different institutions banked, by age, August 2004
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- Figure 162: Number of different institutions banked, by race and ethnicity, August 2004
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- Figure 163: Number of different instituions banked, by household income, August 2004
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- Figure 164: Number of different instituions banked, be level of education, August 2004
- Attitudes towards branch banking
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- Figure 165: Attitudes around banking convenience, by gender, August 2004
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- Figure 166: Attitudes around banking convenience, by age, August 2004
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- Figure 167: Attitudes around banking convenience, by race/ethnicity, August 2004
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- Figure 168: Attitudes toward convenience, by household income, August 2004
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- Figure 169: Attitudes towards convenience, by level of education obtained, August 2004
- Location, Location, Location
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- Figure 170: Location of branch and ATM within 1 mile of work and home, by gender, August 2004
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- Figure 171: Location of branch and atm within 1 mile of work and home, by age, August 2004
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- Figure 172: Location of branch and ATM within 1 mile of work and home, by race/ethnicity, August 2004
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- Figure 173: Location of branch and atm within 1 mile of work and home, by household income, August 2004
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- Figure 174: Location of branch and ATM within 1 mile of work and home, by level of education, August 2004
- Customer Service Check-Up
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- Figure 175: Attitudes towards customer service, by gender
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- Figure 176: Attitudes towards customer service, by age, August 2004
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- Figure 177: Attitudes towards customer service, by race/ethnicity, August 2004
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- Figure 178: Attitudes towards customer service, by household income, August 2004
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- Figure 179: Attitudes towards customer service, by education level, August 2004
- Extending the relationship
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- Figure 180: Ownership of other products with primary bank, by gender, August 2004
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- Figure 181: Ownership of other products with primary bank, by age, August 2004
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- Figure 182: Ownership of other products with a bank, by race/ethnicity, August 2004
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- Figure 183: ownership of other products with primary bank, by household income, August 2004
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- Figure 184: ownership of other products with primary bank, by education level, August 2004
- Preferred methods of completing complex financial activities
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- Figure 185: Preference of conducting business for financial services activities, by gender, August 2004
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- Figure 186: Preference of conducting business for financial services activities, by age, August 2004
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- Figure 187: Preference of conducting business for financial services activities, by race/ethnecity, August 2004
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- Figure 188: Preference of conducting business for financial services activities, by household income, August 2004
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- Figure 189: Preference of conducting business for financial services activities, education level, August 2004
- Depositing and Borrowing Money
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- Figure 190: Preference of depositing and borrowing money, by gender, August 2004
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- Figure 191: Preference of depositing and borrowing money, by age, August 2004
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- Figure 192: Preference of depositing and borrowing money, by race/ethnicity, August 2004
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- Figure 193: Preference of depositing and borrowing money, by household income, August 2004
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- Figure 194: Preference of depositing and borrowing money, by level of education, August 2004
- Southern Region
- The Loyalty Issue
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- Figure 195: Number of different instutions banked, by gender, August 2004
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- Figure 196: Number of different institutions banked, by age, August 2004
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- Figure 197: Number of different institutions banked, by race and ethnicity, August 2004
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- Figure 198: Number of different instituions banked, by household income, August 2004
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- Figure 199: Number of different instituions banked, be level of education, August 2004
- Attitudes towards branch banking
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- Figure 200: Attitudes around banking convenience, by gender, August 2004
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- Figure 201: Attitudes around banking convenience, by age, August 2004
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- Figure 202: Attitudes around banking convenience, by race/ethnicity, August 2004
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- Figure 203: Attitudes toward convenience, by household income, August 2004
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- Figure 204: Attitudes towards convenience, by level of education obtained, August 2004
- Location, Location, Location
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- Figure 205: Location of branch and ATM within 1 mile of work and home, by gender, August 2004
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- Figure 206: Location of branch and ATM within 1 mile of work and home, by age, August 2004
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- Figure 207: Location of branch and ATM within 1 mile of work and home, by race/ethnicity, August 2004
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- Figure 208: Location of branch and ATM within 1 mile of work and home, by household income, August 2004
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- Figure 209: Location of branch and ATM within 1 mile of work and home, by level of education, August 2004
- Customer Service Check-Up
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- Figure 210: Attitudes towards customer service, by gender, August 2004
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- Figure 211: Attitudes towards customer service, by age
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- Figure 212: Attitudes towards customer service, by race/ethnicity, August 2004
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- Figure 213: Attitudes towards customer service, by household income, August 2004
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- Figure 214: Attitudes towards customer service, by education level, August 2004
- Extending the relationship
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- Figure 215: Ownership of other products with primary bank, by gender, August 2004
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- Figure 216: Ownership of other products with primary bank, by age, August 2004
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- Figure 217: Ownership of other products with a bank, by race/ethnicity, August 2004
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- Figure 218: ownership of other products with primary bank, by household income
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- Figure 219: ownership of other products with primary bank, by education level, August 2004
- Preferred methods of completing complex financial activities
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- Figure 220: Preference of conducting business for financial services activities, by gender, August 2004
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- Figure 221: Preference of conducting business for financial services activities, by age, August 2004
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- Figure 222: Preference of conducting business for financial services activities, by race/ethnecity, August 2004
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- Figure 223: Preference of conducting business for financial services activities, by household income, August 2004
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- Figure 224: Preference of conducting business for financial services activities, education level, August 2004
- Depositing and Borrowing Money
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- Figure 225: Preference of depositing and borrowing money, by gender, August 2004
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- Figure 226: Preference of depositing and borrowing money, by age, August 2004
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- Figure 227: Preference of depositing and borrowing money, by race/ethnicity, August 2004
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- Figure 228: Preference of depositing and borrowing money, by household income, August 2004
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- Figure 229: Preference of depositing and borrowing money, by level of education, August 2004
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