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Retail Banking - US - October 2012

SCOPE AND THEMES
What you need to know
Data sources
Consumer study data
Comperemedia
Abbreviations
Terms
Companies mentioned in this report
EXECUTIVE SUMMARY
The market
The number of banks continues to fall
Figure 1: Number of FDIC-insured commercial banks and savings institutions, year- end, 2002-11
Total assets and deposits show strong growth in the past decade
Figure 2: Total assets of all banks, Q2 2007-Q2 2012
The top four banks dominate the industry
Figure 3: Assets of four largest banks, Q2 2012
The industry is strengthening
Where people bank
Figure 4: Type of financial institution for primary banking relationship, all respondents, May 2012
Figure 5: Type of financial institution for banking relationship, by race/Hispanic origin, May 2012
Switching behavior is consistent across income groups
Figure 6: Switching behavior and incidence of multiple accounts, by household income, May 2012
Fees are now the main reason people switch
Figure 7: Top reasons for switching banks, respondents who have switched in last three years, all respondents, any agree, May 2012
Customers leave because of fees, but branch location is important
Figure 8: Attitudes about banks and banking products and services, all respondents, any agree, May 2012
Blacks and Hispanics most want comprehensive services
Figure 9: Attitudes about banks and banking products and services, by race/Hispanic origin, any agree, May 2012
The desirability of bank advisory services
Figure 10: Attitudes about bank advisory services, all respondents, any agree, May 2012
Online financial tools
Figure 11: Usage of web-based financial management tools, by household income, May 2012
Cluster analysis: Dissatisfied Bankers
Opportunity
Banks rethinking branch model
Incentives are key to marketing strategies
The bank of the future
What we think
ISSUES IN THE MARKET
Pressures on the retail banking industry
Opportunities exist
Technology—and its management—are key
Customer-centrism is increasingly important
INSIGHTS AND OPPORTUNITIES
Key points
Conquering Big Data will increase profitability
Mobile banking has room for growth
Figure 12: Banking activities conducted on mobile phone in last year, mobile phone owners, November 2011
More banks getting into prepaid card market
Branch self-service will help differentiate banks
Rethinking branch design
Online tools and financial advice
Figure 13: Usage of web-based financial management tools, by age, May 2012
TREND APPLICATIONS
Trend: Extend My Brand
Industry application
Trend: Boomerang Generation
Industry application
2015 Trend—Access Anything
Industry implications
MARKET SIZE
Key points
The number of banks continues to fall
Figure 14: Number of FDIC-insured commercial banks and savings institutions, year- end, 2002-11
Figure 15: Assets of FDIC-insured commercial banks and savings institutions, year- end, 2002-11
Figure 16: Deposits held by FDIC-insured commercial banks and savings institutions, year-end, 2002-11
Credit unions are becoming more popular
Figure 17: Growth in number, membership, and assets of credit unions, 2002-11
COMPETITIVE CONTEXT
Key points
Big banks are dominating the industry more than ever
Figure 18: Asset market share of financial institutions, 1992, 2011
Figure 19: Assets of four largest banks, as of end of Q2 2012
Credit unions are getting big, but banks are still bigger
Figure 20: Credit union membership growth, 2002-11
Figure 21: Credit union deposit growth, June 2008-June 2012
Figure 22: Credit union asset growth trend, June 2008-June 2012
Branchless banks: wave of the future?
Big banks extending less credit and regional banks are stepping in
SEGMENT PERFORMANCE
Key points
Industry continues to show strength
Figure 23: Net income and assets of all FDIC institutions, Q2 2007-Q2 2012
Figure 24: Net income of top U.S. banks by deposits, Q2 2012 VS. Q2 2011
Figure 25: Net income of top 10 U.S. banks by deposits, 2007-11
Mortgages are helping lift the industry
Figure 26: Mortgage origination estimates, Q1 2011-Q2 2012
Bank failures continue, but fewer banks on Problem List
Figure 27: Number of bank failures, 2004-12 (all as of June 30)
Figure 28: Number of banks on FDIC Problem List, 2004-12
Durbin regulations hampering revenue at the biggest banks
Figure 29: change in interchange revenues for top public U.S. bank holding companies, Q4 2010-Q4 2011
MARKETING CHANNELS
Key points
Banks doing more with email, less with direct mail
Mobile banking is mentioned more often than ever
Other channels
Figure 30: Attitudes about banks and bank communications, by age, any agree, May 2012
Figure 31: Attitudes about banks and bank communications, by household income, May 2012
Figure 32: Attitudes about banks and bank communications, by race/Hispanic origin, May 2012
Retail banks becoming more active in social media
Figure 33: Percentage of users in each demographic group who use social networking sites, Jan.-Feb., 2012
Figure 34: Attitudes about banks and social media, by age, May 2012
The marketing mix continues to change
Figure 35: Importance of channel in 2012, bank executive survey, January 2012
Customers using branches less, self-service more
Figure 36: Percentage of respondents who prefer to use a branch teller for transactions, 2006, 2011, 2012
Branches are still important
MARKET DRIVERS
Key points
Economic growth slower than expected
Figure 37: Quarter-to-quarter change in gross domestic product, Q1 2010-Q2 2012
Figure 38: U.S. Unemployment rate, June 2009-December 2012
Figure 39: Quarter-to-quarter change in total consumer spending, Q1 2010-Q2 2012
New regulations continue to change the way banks do business
Growth in smartphone ownership
Figure 40: U.S. mobile phone unit sales, by segment, 2006-12
Figure 41: Smartphone ownership among American adults, May 2011- February 2012
Home sales are rising and more people need mortgages
Figure 42: Sales of new and existing homes, July 2011-July 2012
Refinance application volumes are at historic highs
Figure 43: Refinance application volume as a percentage of total mortgage application volume, December 2003–December 2011
Figure 44: Conventional conforming 30-year fixed-rate mortgage rates, annual average, 1978–2011
Increased fees are impacting customer loyalty
Figure 45: Reasons for switching banks for respondents who switched in last three years, May 2012
Figure 46: Average fees for banking services, Year-end 2011-Midyear 2012
LEADING COMPANIES
Key points
JPMorgan Chase largest bank by assets
Figure 47: Top 10 largest banks, by assets (Dec. 31, 2010; Dec. 31, 2011; June 30, 2012)
JPMorgan Chase overtakes Bank of America in deposits
Figure 48: Top 10 U.S. commercial banks by deposits as of March 31, 2012
Navy Federal Credit Union is the largest in deposits
Figure 49: Top 10 credit unions by deposits as of June 30, 2012
JPMorgan Chase
Bank of America
Wells Fargo
Citigroup
U.S. Bank
PNC Bank
TD Bank
SunTrust Bank
Capital One
Navy Federal Credit Union
BRAND QUALITIES
Key points
Banks still trying to rebuild reputations
Convenience is a factor
Figure 50: Chase direct mail advertisement, August 2012
Banks increasingly want to be seen as environmentally friendly
Figure 51: Capital One email advertisement, 2012
INNOVATION AND INNOVATORS
Key points
C1 Bank
State Farm Bank
Citibank
Kasasa
Simple
Innovations in branch design
Acru
Figure 52: Interior of Acru Bank branch, July 2012
State Farm Bank
MARKETING STRATEGIES
Key points
Banks are increasing marketing focus on less traditional products
Mobile banking is front and center
Figure 53: ING email advertisement, April 2012
Incentives are increasingly rich
Figure 54: Chase direct mail advertisement, March 2012
Figure 55: ING email advertisement, May 2012
Figure 56: Capital One direct mail advertisement, June 2012
Print advertising
Figure 57: PNC print advertisement, August 2012
Figure 58: TD Bank print advertisement, 2012
Figure 59: Popular Community Bank print advertisement, August 2012
Direct mail advertising
Figure 60: Harris Bank direct mail advertisement, September 2012
Figure 61: Capital One direct mail advertisement, September 2012
Figure 62: KeyBank direct mail advertisement, May 2012
Figure 63: Community Choice Credit Union direct mail advertisement, 2012
Online and email advertising
Figure 64: Bank of America Email advertisement, May 2012
Figure 65: AARP MasterCard Email advertisement, August 2012
Figure 66: Bank of America online advertisement, August 2012
Figure 67: Wells Fargo email advertisement, August 2012
Television and other advertising
Chase Bank
Ally Bank
Capital One
Wells Fargo
Bank of America
THE CONSUMER—TYPE OF INSTITUTION PREFERRED
Key points
Almost half bank at large banks
Figure 68: Type of financial institution for banking relationship, by gender, May 2012
Figure 69: Type of financial institution for banking relationship, by age, May 2012
Figure 70: Type of financial institution for banking relationship, by gender and age, May 2012
Figure 71: Type of financial institution for banking relationship, by household income, May 2012
Figure 72: Type of financial institution for banking relationship, by race/Hispanic origin, May 2012
BANKING-RELATED BEHAVIORS
Key point
Switching behavior and multiple accounts
Figure 73: Switching behavior and incidence of multiple accounts, by age, May 2012
Figure 74: Switching behavior and incidence of multiple accounts, by household income, May 2012
Figure 75: Switching behavior, incidence of multiple accounts, and usage of advisory services, by race/Hispanic origin, May 2012
REASONS FOR SWITCHING BANKS
Key points
Fee sensitivity has increased
Figure 76: Reasons for switching banks, by gender, May 2012
Figure 77: Reasons for switching banks, by age, May 2012
ONLINE FINANCIAL TOOLS
Key points
Use of web-based financial management tools
Figure 78: Usage of web-based financial management tools, by gender, May 2012
Figure 79: Usage of web-based financial management tools, by age, May 2012
Figure 80: Usage of web-based financial management tools, by household income, May 2012
Figure 81: Usage of web-based financial management tools, by race/Hispanic origin, May 2012
Reasons for using web-based financial management tools
Figure 82: Reasons for using web-based financial management tools, by age, May 2012
Figure 83: Reasons for using web-based financial management tools, by household income, May 2012
Figure 84: Reasons for using web-based financial management tools, by race/Hispanic origin, May 2012
ATTITUDES TOWARD BANKING PRODUCTS AND SERVICES
Key points
Customers still think a convenient branch is important
Figure 85: Attitudes about banks and banking products and services, by gender, any agree, May 2012
Figure 86: Attitudes about banks and banking products and services, by age, any agree, May 2012
Figure 87: Attitudes about banks and banking products and services, by household income, any agree, May 2012
Figure 88: Attitudes about banks and banking products and services, by race/Hispanic origin, any agree, May 2012
ATTITUDES ABOUT ADVISORY SERVICES
Key points
Banks and bank communications
Figure 89: Attitudes about bank advisory services, by gender, any agree, May 2012
Figure 90: Attitudes about bank advisory services, by age, any agree, May 2012
Figure 91: Attitudes about bank advisory services, by household income, any agree, May 2012
Figure 92: Attitudes about bank advisory services, by race/Hispanic origin, any agree, May 2012
Usage of advisory services
Figure 93: Actual usage of advisory services, by age, May 2012
Figure 94: Actual usage of advisory services, by household income, May 2012
Figure 95: Actual usage of advisory services, by race/Hispanic origin, May 2012
CLUSTER ANALYSIS
Young Switchers
Demographics
Characteristics
Opportunity
Dissatisfied Bankers
Demographics
Characteristics
Opportunity
Bank Loyalists
Demographics
Characteristics
Opportunity
Cluster characteristic tables
Figure 96: Retail Bank clusters, May 2012
Figure 97: Type of financial institution for banking relationship, by target clusters, May 2012
Figure 98: Behaviors relating to bank products and services, by target clusters, May 2012
Figure 99: Reasons for switching banks, by target clusters, May 2012
Figure 100: Usage of web-based financial management tools, by target clusters, May 2012
Figure 101: Reasons for using web-based financial management tools, by target clusters, May 2012
Figure 102: Attitudes about banks and banking products and services, by target clusters, any agree, May 2012
Figure 103: Attitudes about bank advisory services, by target clusters, any agree, May 2012
Cluster demographic tables
Figure 104: Target clusters, by demographics, May 2012
Cluster methodology
APPENDIX—TRADE ASSOCIATIONS

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