Consumers Eye the Impact of Possible Election Turmoil on their Money
New survey data reveal widespread angst among consumers about the impact of the November presential election on their finances. Banks would be well-advised to be prepared for all outcomes with products that shore up savings and help to manage debt.
By Corey Wrinn Rivel Banking Research
As the presidential election looms on the horizon, banking consumers are demonstrating a heightened interest in how the political landscape might shape their financial futures. This intersection of politics and personal finance is creating a unique set of demands and expectations in the banking sector. For bankers, understanding what may arise will be key to having a successful 2025.
Drawing insights from Rivel Banking Research’s exclusive recent national survey of consumers for The Financial Brand, the following results underscore the imperative for banks and credit unions to plan and be ready to pivot as consumer sentiment will ebb and flow over the next few months with a new incoming president.
An Engaged Consumer Base
The upcoming presidential election has captured the attention of a significant portion of U.S. consumers, with Rivel’s national survey revealing that 63% are actively following the race. This high level of engagement underscores the perceived connection between political outcomes and personal financial well-being. Notably, the interest is not uniform across demographics. Baby Boomers are particularly invested, with 61% closely monitoring the election. Even more striking is the engagement among high-income households, defined as those earning above $100,000 annually, where a remarkable 83% are tuned in to the electoral process.
This heightened attention is not without reason. The survey found that 61% of respondents believe the election result will have a tangible impact on their individual finances. This sentiment is most pronounced among Baby Boomers, with 69% expressing this view, compared to 54% of Gen Z consumers. The disparity highlights the varying levels of financial exposure and concern across generations. Those with more substantial assets, particularly retirees or individuals on the cusp of major financial decisions, are naturally more attuned to the potential ripple effects of election outcomes on their financial stability.
Despite being asset-rich, the Baby Boomer cohort is actively seeking specific attributes in their banking experience. Rivel’s extensive consumer banking research program reveals that a substantial 32% of high-income Boomers would be willing to switch their primary financial institution in search of better deposit rates. Remarkably, this consideration outweighs traditional pain points such as high fees or inconvenient branch locations. This preference suggests a direct link between their election concerns and a focused desire to grow and protect their existing assets.
For financial institutions, these findings present both challenges and opportunities. Banks and credit unions would do well to develop targeted strategies that address the election-related financial concerns of different demographic groups, with a particular focus on Baby Boomers and high-income households. Creating competitive deposit products could be key to retaining and attracting the high-income Baby Boomer segment, given their willingness to switch institutions for better rates.
Additionally, offering tailored financial advisory services that help customers navigate potential post-election economic scenarios could position institutions as trusted partners during this period of heightened uncertainty. Simultaneously, there’s an opportunity to educate younger demographics about the potential long-term impacts of election outcomes on their financial futures, fostering engagement and loyalty among this emerging customer base.
Dig deeper:
- Are Financial Wellness Products Merely Window Dressing for Banks?
- Magical Retirement Thinking: Most Americans Want to Retire Early, But Few Have Plans to Get There
- From Transactions to Trust: Transforming Your Bank into a Financial Coaching Partner with Achieve
Consumers’ Financial Plans and Spending Habits
The survey reveals a complex landscape of consumer spending intentions in relation to the upcoming election. While 46% of consumers believe the election outcome would influence their spending habits due to concerns about the future economy, a significant 30% across all generations and income bands remain uncertain about how the results might affect their financial decisions. This widespread uncertainty suggests a cautious "wait-and-see" approach among a sizable portion of the electorate, even as recent interest rate reductions could potentially impact their future financial choices.
Despite this ambiguity, the survey uncovers a noteworthy trend in planned major financial moves. A substantial 32% of consumers intend to undertake significant financial actions within the next 12 months, including buying homes, launching businesses or entering retirement. Gen Z emerges as the most proactive cohort in this regard, with an impressive 52% of those under 27 years old planning such financial milestones. This generation’s financial ambitions are further delineated by specific product interests — 44% are looking to acquire a credit card, 32% are in the market for a savings account and 18% are considering opening a retirement account within the next year.
These findings present a clear directive for banks and credit unions. Financial institutions would be well advised to focus their attention on meeting the demands of this younger generation as they embark on a new phase of their financial journey. By tailoring products and services to match the specific needs of Gen Z – from credit options to savings vehicles and introductory retirement planning – banks can position themselves as key partners in these crucial early stages of financial development. This strategy not only addresses immediate consumer needs but also has the potential to foster long-term customer relationships as these young adults progress through various life and financial stages.
Key Worries and Next Steps for Financial Institutions
As the election draws near, banking institutions and policymakers will need to closely monitor these evolving consumer concerns and tailor their offerings and guidance to address these needs. Understanding what concerns consumers can allow financial institutions mitigate worries but also take advantage of those looking to grow their product set.
Recommendations for Financial Institutions:
1. Enhance communication and transparency: Provide clear and timely information to consumers about how potential policy changes could impact their personal finances. This can help alleviate uncertainty and build trust with the institution. Importantly, frequent communication in their preferred method (email, text, physical mail) is essential.
2. Develop election-proof products: Consider flexible financial products that can adapt to different economic scenarios. Offer financial planning services and interactive tools that help customers understand and prepare for various post-election economic outcomes. Locking in long-term CDs now and helping them understand the intricacies of adjustable rate mortgages, building confidence in your advisement capabilities.
3. Prepare for gen Z’s growth: Create targeted "financial milestone" packages for Gen Z, bundling credit cards, high-interest savings accounts, and starter retirement products. Provide digital financial education tools to help this demographic navigate their first major financial decisions in (and beyond) an election year.
4. Secondary product uplift: It’s not only about checking accounts. Remind both customers and prospects that you may already have tools to help them in the long term. Knowing there are concerns about healthcare costs and social security right now, marketing competitive HSA/FSA plans or a variety of IRAs will hit a pain point among consumers, building your innovative reputation in the process.
By proactively addressing the concerns and expectations of banking consumers in this election year head-on, financial institutions can position themselves to attract new business and maintain strong customer relationships in the years to come.
This year, The Financial Brand and Rivel have partnered to bring banking professionals exclusive primary research and analysis on US banking consumers, on a monthly basis. For more information on Rivel Banking Research’s benchmarking, market opportunity highlights and on-hand brand perception insights for your institution, contact: Corey Wrinn, Managing Director, Rivel Banking Research at [email protected]
