Consumers Freaking Out Financially: How Bank Marketers Must Respond

People want to feel safe not only physically but financially, and new national data reveals growing undercurrents of concern that banks and credit unions need to factor into their marketing and communications. Attitudes toward debt and in-person banking have shifted sharply.

Based on a recent analysis of detailed consumer sentiments and interactions that we track on an ongoing basis, the pandemic has had a significant impact on consumers’ relationships with and need for financial services. As banks and credit unions plan their marketing strategies for the remainder of the year and into 2021, they need to be factoring in current customer anxieties, as well as their attitudes toward credit and banking services.

Since the onset of the pandemic in March, Resonate has seen fluctuations in consumer attitudes and behaviors unlike any other time in the 12-year history of our U.S. National Consumer Study. Since the pandemic began, consumers have started identifying more values as being important to them than ever before. This essentially tells us that people are not switching values for the long term (at least not yet), but that other values are becoming important in this unprecedented time that weren’t before.

The list of values that have become more important to Americans is topped by two, safety and security, which have assumed increased importance for 30% and 24.8% of U.S. adults respectively.

The rise of these two values have significant implications for people’s financial habits and attitudes toward financial services. Since lockdowns began, more than two-thirds of consumers have consistently said they’re deeply concerned about the economic impact of COVID-19.

The percentage of consumers who expect the economic impact of COVID-19 to extend into Spring 2021 and beyond has risen 43% since April, with nearly four out of five consumers now bracing for longer-term effects.

Connecting with Financially Anxious Consumers

Since March, millions of people have encountered new hardships that have driven them to research topics like unpaid leave, personal bankruptcy and money-saving strategies. When we examine this group of economically challenged consumers, compared to the average U.S. consumer, we find that they are:

  • Mostly female, aged 45-64.
  • Have a household income of $100,000-$150,000.
  • Are 239% more likely to be retired than the average U.S. consumer.
  • Are 52% more likely to have a child in college.
  • Are 1.6 times more likely to complete payment on a mortgage over the next year.
  • Are 1.5 times as likely to sell a home or condo in the next year.
  • Are 68% more likely than average consumer to value a stable society.

These elements can prove important when banks and credit unions are looking to tailor messaging and content to support their existing customers undergoing hardship and emphasize the products and services that can help them through those hardships. For audiences experiencing elevated financial anxiety, marketing and messaging around low ATM fees, higher interest rates on deposits and bonuses for opening an account or making a direct deposit can be particularly effective.

Overall, personal finance indicators remain quite tenuous. For example, since July 2020, we’ve seen an increase in the number of people who are likely to request a payment deferral on current credit cards. This reveals an undercurrent of concern that’s greatly influencing their approach to financial services. At present, only 27% of consumers say they’re living comfortably.

Shifts in Attitudes Toward Credit Cards

We’ve seen a notable shift in how people are using credit cards in the pandemic. Despite the fact that more people are struggling to pay for necessities right now, they also say that they’re using credit cards less in the fall of 2020 compared to as recently as July, continuing a trend seen earlier in the outbreak. This suggests more people are taking steps to aggressively manage their spending by avoiding new debt and tightening their budgets.

At present, about 62% of the U.S. population believes that the economy will not return to “normal” until 2021 or later. Interestingly, the further out they believe it will take the economy to bounce back, the less likely they are to apply for a new credit card. In addition, the people who think economic recovery is further off are also less likely to carry over balances on their credit cards, with nearly one in two saying they never carry a balance.

It is interesting to note, though, that this group is over 50% more likely than the U.S. population to carry four or more credit cards, and they are 12% more likely to have an excellent credit history. Using these insights, financial marketers can develop a targeted messaging strategy to gain share of wallet by promoting features they favor, such as rewards, cash back and automatic payments for utilities and entertainment subscriptions.

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Segmenting In-Person Customers from Digital Customers

Although people have become more willing to visit grocers and big-box stores than they were earlier in the pandemic — despite upticks in infection rates — the number of people willing to visit banks has actually decreased 20% since June. Thus, it’s important for banks and credit unions to be able to identify the individuals who are still interested in having in-person banking experiences, versus those who don’t plan to go back into banks in the foreseeable future. Messaging to each group should be quite distinct.

At present, more than half of the online adult population plans to bank using mobile or web technology, and these individuals rank free services (like checking accounts) or bonuses for opening accounts as being most important in attracting their business.

When considering in-person bank customers, it’s important to overlay what we know about people’s reactions to COVID-19 on top of messaging plans. For example, when we ask people what is required for them to show up to a bank in person during the pandemic, they say that masks and gloves is the top safety measure within a bank’s control that they expect, followed by good social distancing protocols. These are important elements of the consumer mindset to consider as you craft your marketing strategy. In addition, people who are continuing to bank in-person say that knowledgeable staff and ease of use are also important considerations to them.

Right now, consumers want to feel safe in all aspects of their lives, especially financially. This means that people right now are less likely to make changes to their financial partners. That said, they’re placing more importance that ever on good communication and feeling valued by their banking providers.

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