2016 Omni-Channel Bank Shopper Research Report reveals that the “Thin Branch Ready” segment now comprises 40% of new account shoppers and these shoppers have decreasing commitment to relationships with national banks
Novantas released the 2016 Omni-Channel Bank Shopper Research Report, presenting new findings from the Company’s ongoing U.S. checking shopper surveys. The 2016 report reveals that the dominant, fastest growing segment today is “Thin Branch Ready” consumers, characterized by little dependence on, but high attachment to branches. The research further finds that this high-value segment is ready to shift loyalties from the top three national banks to regional and direct banks for their next relationship.
The Report highlights a rapidly changing landscape for checking acquisition, with banks competing fiercely for a shrinking pool of primary checking shoppers. The annual rate of new primary checking account formation has dropped by half in the past decade and today averages only 7% of checking consumers in a typical market.
“In this challenging household acquisition climate it is important for banks to understand who is shopping, what matters to these consumers, and how banks can best win their business,” says Chris Musto, a Director in Novantas’ Marketing and Distribution Strategy practice. “There is near term opportunity however, for banks to capture new target segments who are potential switchers — especially Millennials, who represent the largest pool of prospective checking switchers.”
The research points to rapidly shifting imperatives for retail banks, with differential customer acquisition strategies required by segment and market. Major banks must develop a market-by-market, multi-lever approach to influencing customer awareness, preference and purchase behaviors or risk losing to more specialized marketers.
“High branch density is an increasingly costly and inefficient lever for customer acquisition,” says Kevin Travis, EVP and Head of Marketing and Distribution Strategy at Novantas. “There must be an integrated approach with other physical channels, digital banking, marketing message and volume, as well as brand. Indeed as the report reveals, perceived convenience, the biggest household acquisition driver, is highest at banks that have allocated investment to building share of voice, brand distinctiveness and digital capabilities and experiences.”
About Novantas Omni-Channel Bank Shopper Research
Novantas Omni-Channel Bank Shopper Research is conducted through an online survey provided to a panel of customers that is statistically significant across age, income and geography. The 2016 edition updates studies conducted in 2014, 2012, 2011, and 2006 and includes data on 8,465 recent primary checking purchasers and prospective switchers across 39 U.S. markets, and evaluates “branch dependence” (use of the branch) and “branch attachment” (attitudes towards the branch) and highlights the profiles, attitudes, behaviors and trends of consumers who are shopping for and/or opening primary checking accounts.
Novantas is the industry leader in analytic advisory services and technology solutions for banks. We create superior value for our clients through deep and insightful analysis of the information that drives the financial services industry — across pricing, product development, treasury and risk management, distribution, marketing, and sales management. For more information visit www.novantas.com.
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