Table of Contents
Executive Summary
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- 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
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- How can banks finally eliminate the trust issue?
- Issues
- Implications
- What is next for credit unions?
- Issues
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- Figure 1: Percentage of respondents who have primary accounts at credit unions, December 2013, November 2014
- Implications
Trend Application
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- Inspire Trend: Data Creators
- Inspire Trend: Cam Cam
- Inspire Trend: Life Hacking
Market Size
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- Key points
- The number of banks and credit unions continues to fall
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- Figure 2: Number of FDIC-insured banks and credit unions, 1995-2014*
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- Figure 3: Assets of FDIC-insured commercial banks and savings institutions, year-end, 2005-14*
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- 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
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- Figure 5: Credit unions numbers, members, and assets, 2004-13
Market Drivers
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- Key points
- The economy is strengthening
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- 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
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- 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
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- Figure 10: Banking transactions conducted via smartphone, November 2013 versus December 2014
- Use of tablets for banking
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- Figure 11: Banking transactions conducted via tablet, November 2013 versus December 2014
Competitive Context
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- Key points
- Largest retail banks
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- Figure 12: Largest US banks, measured by assets (Dec. 31, 2013, Dec. 31, 2014)
- Largest credit unions
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- Figure 13: Largest US credit unions, measured by assets, Dec. 31, 2013-Sept. 30, 2014
- Competition from all sides
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- 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
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- 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
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- 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
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- Key points
- Gamification of savings
- BankMobile – Direct bank, no fees
- Finally – Smart ATMs
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- 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
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- Key points
- Mailing activity
- Email acquisition efforts
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- Figure 21: Acquisition email by product, Q3 2013-Q3 2014
- The marketing advantage of bank branches
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- Figure 22: Conduct transactions at a bank/credit union branch, 2013 versus 2014
- Incentives are still popular
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- Figure 23: Chase checking account incentive direct mail ad, 2015
- Figure 24: Chase checking account incentive direct mail ad, 2015 (continued)
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- 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
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- Figure 28: M&T Bank Apple Pay email ad, 2014
- Figure 29: Capital One Apple Pay email, 2014
- Wells Fargo’s Apple Pay promotion
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- Figure 30: Wells Fargo Apple Pay email, 2014
- Capital One 360
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- Figure 31: Capital One 360 Café online ad, 2014
- Figure 32: Capital One 360 checking account online ad, 2014
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- Figure 33: Cap One 360 branding online ad, 2014
- Figure 34: Cap One 360 branding online ad, 2014 (continued)
- Online banking functions
- Wells Fargo
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- Figure 35: Wells Fargo SurePay email ad, 2014
- Bank of the West
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- Figure 36: Bank of the West mobile banking email ad, 2014
- Figure 37: Chase mobile banking email ad, 2014
Social Media
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- Key points
- Market overview
- Key social media metrics
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- Figure 38: Key performance indicators, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015
- Brand usage and awareness
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- Figure 39: Brand usage and awareness of retail banking and credit union brands, November 2014
- Interaction with brands
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- 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
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- Figure 41: Online mentions, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015
- What are people talking about online?
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- Figure 42: Mentions by topic of conversation, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015
Account/Product Ownership
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- Key points
- Men have a greater variety of accounts and products
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- Figure 43: Ownership of financial accounts/products, by gender, November 2014
- Opportunity among Millennials
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- Figure 44: Ownership of financial accounts/products, by generations, November 2014
- Single people offer opportunity
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- Figure 45: Ownership of financial accounts/products, by marital/relationship status, November 2014
- Mobile device owners are more likely to be customers
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- Figure 46: Ownership of financial accounts/products, by mobile device ownership, November 2014
Location of Primary Account
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- Key points
- Large banks reign
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- Figure 47: Location of primary account, November 2014
- Checking accounts
- Women prefer small banks
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- 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
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- Figure 49: Type of institution where primary savings account is held, by gender, November 2014
- Residential mortgages
- Small community banks attract Millennials
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- Figure 50: Type of institution where primary residential mortgage is held, by age, November 2014
- Investment accounts
- Large banks attract young investors
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- Figure 51: Four most popular types of institution where primary investment account is held, by age, November 2014*
Attitudes toward Banks and Credit Unions
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- Key points
- Customer satisfaction
- Older customers are most satisfied with products and services
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- Figure 52: Customer satisfaction with banks/credit unions, by age, November 2014
- Trust
- Women are more concerned than men
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- Figure 53: Trust in banks and credit unions, by gender, November 2014
- Young people have regained trust
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- Figure 54: Trust in banks and credit unions, by age, November 2014
- Attitude toward banks/credit unions and communications
- More education is needed
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- Figure 55: Attitude toward institutions and communications, by age, November 2014
How Banking is Conducted
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- Key points
- Different channels for different transactions
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- Figure 56: How banking is conducted, November 2014
- Men use online banking far more than women
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- Figure 57: Transactions conducted on desktop/laptop, by gender, December 2014
- Computers generally favored among older customers
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- Figure 58: Transactions conducted on desktop/laptop, by generation, November 2013-December 2014
- Smartphones
- Men are more comfortable than women with mobile banking
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- Figure 59: Transactions conducted on smartphone, by gender, November 2014
- Millennials are leading the mobile charge
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- Figure 60: Transactions conducted on smartphone, by generation, November 2014
- Having young children increases banking by smartphone
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- 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
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- Figure 62: Transactions conducted on tablet, by gender, November 2014
- Use of tablets doesn’t differ much among generations
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- Figure 63: Transactions conducted on tablet, by generation, November 2014
- Branches
- Women are more likely than men to go to branches
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- Figure 64: Transactions conducted in a branch, by gender, November 2014
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- Figure 65: Transactions conducted in a branch, by gender, November 2014
- Institutions need to promote mobile banking to those who have mobile devices
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- Figure 66: Transactions conducted in a branch, by mobile device ownership, November 2014
Interest in Products and Services
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- Key points
- Secure credit cards and financial advice are most desired
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- Figure 67: Interest in banking products and services, November 2014
- Already use
- Men are more likely to use a variety of products and services
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- Figure 68: Products/Services already use, by gender, November 2014
- Millennials are early adopters
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- Figure 69: Products/Services already use, by generations, November 2014
- Bank alternatives are more popular among Hispanics
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- Figure 70: Products/Services already use, by Hispanic origin, November 2014
- Urban dwellers are more engaged with financial products
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- Figure 71: Products/Services already use, by area, November 2014
- High-income earners like online banks
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- 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
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- Figure 73: Products/Services not used, but would be interested in using, by gender, November 2014
- Millennial women want advice
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- Figure 74: Products/Services not used, but would be interested in using, by gender and age, November 2014
- Swing Generation is not really interested
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- Figure 75: Products/Services not used, but would be interested in using, by generations, November 2014
- Banks need to target Hispanics
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- Figure 76: Products/Services not used, but would be interested in using, by Hispanic origin, November 2014
Switching Considerations
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- Key points
- Women are more loyal bank customers
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- Figure 77: Switching considerations, by gender, November 2014
- Millennials may need to be courted
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- Figure 78: Switching behavior, by generation, November, 2014
- Credit union customers are the most loyal
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- Figure 79: Switching behavior, by type of bank/credit union used, November, 2014
Reason for Switching
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- Key points
- Electronic banking has kept some from switching
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- Figure 80: Reasons for switching, November 2014
Appendix: Other Useful Consumer Tables
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- Account/product Ownership
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- Figure 81: Ownership of financial accounts/products, by age, November 2014
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- Figure 82: Ownership of financial accounts/products, by household income, November 2014
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- Figure 83: Ownership of financial accounts/products, by race/Hispanic origin, November 2014
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- Figure 84: Ownership of financial accounts/products, by mobile device ownership, November 2014
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- Figure 85: Ownership of financial accounts/products, by smartphone ownership, November 2014
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- Figure 86: Ownership of financial accounts/products, by tablet ownership, November 2014
- Location of primary account
- Checking accounts
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- Figure 87: Location of primary account, November 2014
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- Figure 88: Type of institution where primary checking account is held, by gender, November 2014
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- Figure 89: Type of institution where primary checking account is held, by age, November 2014
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- Figure 90: Type of institution where primary checking account is held, by generations, November 2014
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- Figure 91: Type of institution where primary checking account is held, by household income, November 2014
- Savings accounts
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- Figure 92: Type of institution where primary savings account is held, by gender, November 2014
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- Figure 93: Type of institution where primary savings account is held, by age, November 2014
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- Figure 94: Type of institution where primary savings account is held, by generations, November 2014
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- Figure 95: Type of institution where primary savings account is held, by household income, November 2014
- Residential mortgages
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- Figure 96: Type of institution where primary residential mortgage is held, by gender, November 2014
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- Figure 97: Type of institution where primary residential mortgage is held, by generations, November 2014
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- Figure 98: Type of institution where primary residential mortgage is held, by household income, November 2014
- Investment accounts
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- Figure 99: Four most popular types of institution where investment account is held, by gender, November 2014
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- Figure 100: Type of institution where investment account is held, by household income, November 2014
- Attitudes toward banks and credit unions
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- Figure 101: Attitude toward banks and credit unions, by gender, November 2014
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- Figure 102: Attitude toward banks and credit unions, by age, November 2014
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- Figure 103: Attitudes toward banks and credit unions, by generations, November 2014
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- Figure 104: Attitudes toward banks and credit unions, by household income, November 2014
- How banking is conducted
- Desktop/laptop
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- Figure 105: Transactions conducted on desktop/laptop, by age, November 2014
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- Figure 106: Transactions conducted on desktop/laptop, by gender and age, November 2014
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- Figure 107: Transactions conducted on desktop/laptop, by household income, November 2014
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- Figure 108: Transactions conducted on desktop/laptop, by mobile device ownership, November 2014
- Smartphone
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- Figure 109: Transactions conducted on smartphone, by age, November 2014
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- Figure 110: Transactions conducted on smartphone, by household income, November 2014
- Tablets
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- Figure 111: Transactions conducted on tablet, by age, November 2014
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- Figure 112: Transactions conducted on tablet, by household income, November 2014
- Branches
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- Figure 113: Transactions conducted in branch, by age, November 2014
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- Figure 114: Transactions conducted in branch, by household income, November 2014
- ATMs
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- Figure 115: Transactions conducted on ATM, by gender, November 2014
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- Figure 116: Transactions conducted on ATM, by age, November 2014
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- Figure 117: Transactions conducted on ATM, by household income, November 2014
- Interest in product and services
- Already use
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- Figure 118: Products/Services already use, by age, November 2014
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- Figure 119: Products/Services already use, by region, November 2014
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- Figure 120: Products/Services already use, by mobile device ownership, November 2014
- Don’t use but would be interested in using
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- Figure 121: Products/Services not used, but would be interested in using, by age, November 2014
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- Figure 122: Products/Services not used, but would be interested in using, by household income, November 2014
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- Figure 123: Products/Services not used, but would be interested in using, by mobile device ownership, November 2014
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- Figure 124: Products/Services not used, but would be interested in using, by smartphone ownership, November 2014
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- Figure 125: Products/Services not used, but would be interested in using, by tablet ownership, November 2014
- Any interest
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- Figure 126: Products/Services interested in using, any interest, by gender, November 2014
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- Figure 127: Products/Services interested in using, by age, November 2014
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- Figure 128: Products/Services interested in using, by generations, November 2014
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- Figure 129: Products/Services interested in using, by household income, November 2014
- Switching behavior
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- Figure 130: Switching considerations, by age, November 2014
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- Figure 131: Switching considerations, by household income, November 2014
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- Figure 132: Switching considerations, by mobile device ownership, November 2014
Appendix: Social Media
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- Key brand metrics
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- Figure 133: Key social media indicators of selected retail banking and credit union brands, January 2015
- Online conversations
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- Figure 134: Online mentions, selected retail banking and credit union brands, Jan. 26, 2014-Jan. 25, 2015
- Brand usage or awareness
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- Figure 135: Brand usage or awareness, October 2014
- Figure 136: Chase usage or awareness, by demographics, October 2014
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- Figure 137: Wells Fargo usage or awareness, by demographics, October 2014
- Figure 138: Capital One 360 usage or awareness, by demographics, October 2014
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- Figure 139: Ally Bank usage or awareness, by demographics, October 2014
- Figure 140: USAA usage or awareness, by demographics, October 2014
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- Figure 141: Navy Federal Credit Union usage or awareness, by demographics, October 2014
- Activities Done
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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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