Marketing Financial Services to Younger Consumers - US - February 2007

SCOPE AND THEMES
What you need to know
Scope of this report
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Key highlights
Mobility and education
Factors impacting the choice of financial institution
Number of banking relationships
Young consumers and banking products/services
Major trends being driven by younger consumers
YOUNG ADULTS AND WHERE THEY KEEP THEIR MONEY
Introduction
 WHAT YOUNGER CONSUMERS LOOK LIKE
Figure 1: U.S. total population, by age, 2001-11
Figure 2: Percentage of age cohorts with undergraduate degree, 2005
 WHERE THEY BANK NOW
Figure 3: Type of banking institution for primary banking relationship, by gender and age, December 2006
Figure 4: Type of banking institution for primary banking relationship, by income, December 2006
Figure 5: Type of banking institution for primary banking relationship, by race/ethnicity, December 2006
Figure 6: Primary banking institution used in last 12 months, by age, June 2006
Figure 7: Investment/mutual fund firm used in last 12 months, by age, June 2006
 INVESTMENT, SAVINGS AND LOAN ACCOUNTS—WHERE THEY ARE HELD
Figure 8: Types of investments/savings accounts owned, by age, Spring 2006
Figure 9: Type of loans held, by age, Spring 2006
Figure 10: Type of institution where loan accounts are held (for those who have a loan of this type), by age, Spring 2006
LOYALTY AND THE YOUNGER CONSUMER
 MOBILITY TRENDS
Figure 11: Total mobility, by age, 2004-05
Figure 12: General mobility of persons 25 years and over, by age and educational attainment, 2004-05
Figure 13: Number of times respondents have changed banking institutions, by gender and age, December 2006
Figure 14: Frequency Canadian respondents have changed banks in last five years, by age, December 2006
Figure 15: Number of times respondents have changed banking institutions, by education, December 2006
Figure 16: Number of times respondents have changed banking institutions, by current employment status, December 2006
Figure 17: Number of times respondents have changed banking institutions, by race/ethnicity, December 2006
Figure 18: Number of times respondents have changed banking institutions, by current type of primary banking institution, December 2006
 LOCATION, LOCATION, LOCATION (EVEN MORE IMPORTANT THAN FEES)
Figure 19: Primary influence as to choice of bank, by gender and age, December 2006
Figure 20: Primary influence as to choice of bank, by income, December 2006
Figure 21: Primary influence as to choice of bank, by race/ethnicity, December 2006
Figure 22: Primary influence as to choice of bank, by current work/educational status, December 2006
Figure 23: Primary influence as to choice of bank, by education, December 2006
Figure 24: Primary influence as to choice of bank, by current type of primary banking institution, December 2006
 ENTICING YOUNG CONSUMERS TO SWITCH
Figure 25: Reasons respondents would switch banks, by gender and age, December 2006
Figure 26: Reasons respondents would switch banks, by income, December 2006
Figure 27: Reasons respondents would switch banks, by race/ethnicity, December 2006
Figure 28: Reasons respondents would switch banks, by education/employment status, December 2006
Figure 29: Reasons respondents would switch banks, by current type of primary banking institution, December 2006
Figure 30: Importance of banking services—18-24 year old respondents, December 2006
Figure 31: Importance of banking services—25-34 year old respondents, December 2006
Figure 32: Perceptions as to whether financial services companies are doing enough to ensure the safety of personal information, by gender and age, August 2006
Figure 33: Likelihood of switching to a different institution for better security, by gender and age, August 2006
 TWO- (AND THREE-) TIMING
Figure 34: Number of banking relationships, by gender and age, December 2006
Figure 35: Number of banking relationships, by income, December 2006
Figure 36: Number of banking relationships, by type of financial institution, December 2006
 YOUNG ADULTS ARE VISITING BRANCHES FREQUENTLY
Figure 37: Frequency of personal interaction with banks by customers with online banking access, by age, April 2006
 FOCUS ON ONLINE BANKING AS A DIFFERENTIATOR
Figure 38: Percentage of respondents who are online, have visited an online banking site, and frequency of usage, by age, Spring 2006
Figure 39: Internet banking services used by those with bank or brokerage accounts, by age, April 2006
Figure 40: Respondents who use online banking services, how used, by age, April 2006
Figure 41: Respondents with bank or brokerage accounts who do not use online banking services, reasons why not, by age, april 2006
Figure 42: Respondents with bank or brokerage accounts who do not use online banking services, likelihood of using Internet banking in the next year, by age and income, April 2006
Figure 43: Features that online banking users like or would prefer to have, by age, April 2006
Figure 44: Type of institution used for online banking, by age, April 2006
YOUNG CONSUMER-CENTRISM
 IS GENERATIONAL SEGMENTATION INFORMATIVE?
Figure 45: Attitudes towards money, by age, 2006
Figure 46: Attitudes towards insurance, by age, 2006
Figure 47: Attitudes towards investments and advice, by age, 2006
 APPROACHING UNIVERSAL ACCEPTANCE OF DEBIT CARDS
Figure 48: Debit card ownership, by gender and age, August 2006
Figure 49: Frequency of debit card usage, by age, August 2006
Figure 50: Preferred method of payment, by gender and age, December 2006
Figure 51: Attitudes toward rewards and rewards card fees, by age, August 2006
Figure 52: Debit card purchase amounts, by age, August 2006
 CREDIT CARD OWNERSHIP AND USAGE
Figure 53: Percentage of individuals with at least one credit card, by age, Spring 2006
Figure 54: Individuals owning any credit card, by age, Spring 2006
Figure 55: Have any credit card, by age, 2002-06
Figure 56: Have credit card, Spring 2006
Figure 57: Type of credit card owned, by age, Spring 2006
Figure 58: Open rate for direct mail credit card advertising, by age, October 2006
Figure 59: Respondents who have a credit card and typically open credit card offers—what would motivate them to open the envelope, by age, October 2006
Figure 60: Credit card payment behavior, by gender and age, December 2006
Figure 61: Amount in non-retirement savings account, by gender and age, December 2006
 TARGETING THE TEEN
Figure 62: Credit card ownership as a teenager, by gender and age, December 2006
Figure 63: Debit card ownership as a teenager, by gender and age, December 2006
Figure 64: Teens’ mail/phone order purchases, how purchased, by age, Spring 2006
Figure 65: Teens’ Internet purchases, how purchased, by age, Spring 2006
Figure 66: Type of bank accounts currently held by teens, by age, Spring 2006
Figure 67: Parental presence over banking relationship, by age, August 2004
Student financial aid
 STUDENT POWER
Figure 68: Preferred method of payment, by education/employment status, December 2006
Figure 69: Credit card payment behavior, by education/employment status, December 2006
Figure 70: How education is funded for college students, by gender and age, December 2006
Figure 71: How education is funded for college students, by gender and age, December 2006
Figure 72: Importance of banking services—respondents aged 18-24 and full-time college students, December 2006
 MOVERS AND SHAKERS
Figure 73: Importance of banking services—25-34 year old respondents, December 2006
ADVERTISING TO YOUNG CONSUMERS
Targeting 18-25 – high volume acquisition mailings
Figure 74: HSBC Platinum Mastercard, September 2006
Figure 75: HSBC Platinum Mastercard, December 2006
Figure 76: Chase Flexible Rewards Visa Platinum Card, December 2006
Figure 77: BP Visa Card from Chase Bank, October 2006
Figure 78: Visa Platinum Card from Capital One Bank
Figure 79: Personal Loan from CitiFinancial, January 2007
Figure 80: Line of Credit from Bank of America, September 2006
Targeting 26-34 – high volume acquisition mailings
Figure 81: Platinum MasterCard from Chase Bank, January 2007
Figure 82: Mileage Plus Visa Card from Chase Bank, January 2007
Figure 83: World Wildlife Fund Platinum Visa Card from Chase Bank, January 2007
Targeting younger financial consumers—television advertising
Figure 84: A.G Edwards television advertisement, 2006
Figure 85: Edward Jones television advertisement, 2006
Figure 86: fidelity myPlan television advertisement, 2006
Figure 87: Nationwide television advertisement, 2006
Figure 88: Saveandinvest.org television advertisement, 2006
Figure 89: Wachovia television advertisement, 2006
YOUNG CONSUMERS IN THE NEXT DECADE
Gen X and Gen XY expectations
Figure 90: Age at which respondent started or plans to start saving to buy a home, by gender and age, December 2006
Figure 91: Age at which respondent bought or plans to buy a home, by gender and age, December 2006
Figure 92: Age at which respondents started saving or expect to start saving for retirement, by gender and age, December 2006
Figure 93: Expectations of receiving a lump-sum payment, by gender and age, December 2006
 PEOPLE ARE ONLY GOING TO BECOME MORE MOBILE
Contactless cards
Figure 94: Respondents who would use contactless technology, by gender and age, October 2006
Figure 95: Respondents who would use contactless technology—what they see as the advantages, by gender and age, October 2006
Figure 96: Respondents who would not use contactless technology—what they see as the disadvantages, by gender and age, October 2006
MAJOR TRENDS BEING DRIVEN BY YOUNGER CONSUMERS
 CUTTING OUT THE MIDDLEMAN—SOCIAL NETWORKING
 PICK A CAUSE—GREEN MARKETING
APPENDIX: TRADE ASSOCIATIONS