Convergence and Brand Management in Financial Services - US

Within this report Mintel presents the most salient findings of consumer research in the financial services market, particularly at the edge of convergence. “Convergence,” as used in this report, refers to the collision between non-traditional and traditional sectors. For instance, U.S. banks have traditionally been the providers of checking accounts and CDs, but now non-traditional providers such as insurance companies and brokerage firms offer such accounts. Conversely, banks are now able to offer investment choices rivaling those from traditional brokerage firms. The U.S. financial services marketplace has become crowded with competitors in an all-out battle for consumer mindshare.

Convergence of services has been a growing factor in the U.S. financial services market for some time; this report assesses the impact of convergence, to date, on consumer attitudes and behavior. Of particular interest is the amount of traction gained by non-traditional providers in dislodging traditional consumer attitudes and behavior. Therefore, a key focus of this report is consumer usage of and attitudes towards different types of financial services institutions.

Mintel’s exclusive consumer research sheds light on how financial services institutions have used advertising and branding to tap into key concerns, lifestyles and psychographic traits of various demographics. Financial services marketers need to refine their understanding of consumer behavior and attitudes so they can better connect with potential and existing customers.

Scope and Themes

What you need to know

Scope of this report

Methodology

Abbreviations and terms

Abbreviations

Terms

Executive Summary

Limits of convergence

A jaded advertising audience

Perceptions of branding attributes

Battling for mindshare

Independent financial advisors

Investment preferences

How investable funds are categorized

Convergence and insurance

Convergence and telecom

Attitudes toward Financial Services Advertising: A Jaded Audience

It’s hard to score big with a disinterested crowd

Figure 1: Attitudes toward financial services advertising, by gender, September 2007

Figure 2: Attitudes toward financial services advertising, by age, September 2007

Figure 3: Attitudes toward financial services advertising, by household income, September 2007

Figure 4: Attitudes toward financial services advertising, by Hispanic/not Hispanic, September 2007

Figure 5: Attitudes toward financial services advertising, by student/no student, September 2007

Figure 6: Attitudes toward financial services advertising, by race, September 2007

Perceptions of Brand Attributes

Branding summary

The most honest, familiar, safe, and/or reliable companies

Figure 7: Rankings of financial companies described as “honest,” “familiar”, “safe”, “reliable” and “no opinion”, September 2007

The most unique, knowledgeable, expensive, and/or convenient companies

Figure 8: Rankings of financial companies described as “knowledgeable”, “unique”, “expensive”, “convenient” or “none” or “no opinion” for all attributes, September 2007

Battling for Mindshare

Self-identification with the Outsider

Youth and the unconventional spirit

Figure 9: Self-identification with the unconventional, by age, September 2007

High rollers and the unconventional spirit

Figure 10: Self-identification with the unconventional, by household income, September 2007

Figure 11: Self-identification with the unconventional, by student/no student, September 2007

Case study: WaMu’s outsider branding strategy

Figure 12: Rankings of financial companies described as “unique,” by age, September 2007

Figure 13: Rankings of financial companies described as “unique,” by household income, September 2007

Figure 14: Rankings of financial companies described as “unique,” by race/ethnicity, September 2007

Figure 15: Rankings of financial companies described as “unique,” by student/no student, September 2007

Figure 16: Rankings of financial companies described as “unique,” by region, September 2007

Sample advertising tapping into the ‘outsider’ spirit: Washington Mutual

Figure 17: WaMu print advertisement, August 2007

Honesty and Trust

Figure 18: Rankings of financial companies described as “honest,” by region, September 2007

Figure 19: Rankings of financial companies described as “don’t know,” by region, September 2007

The anxious crowd

Figure 20: Feelings of financial security, by gender, September 2007

Figure 21: Concern about identity theft, by gender, September 2007

Sample advertising targeted at the anxious crowd: State Farm

Figure 22: State Farm, September 2007

Figure 23: State Farm, September 2007

American lifestyles

Figure 24: Fitness and sports activities, by gender, September 2007

Figure 25: Leisure time activities, by gender, September 2007

Sample lifestyle advertising: Bank of America and Chase

Figure 26: Bank of America print advertisement, October 2007

Figure 27: Bank of America print advertisement, September 2007

Figure 28: Bank of America print advertisement, September 2007

Figure 29: Chase print advertisment, October 2007

Figure 30: Chase Print advertisement, August 2007

The Limits of Convergence

The dominance of the traditional model: preferred choices for savings and investment accounts

Figure 31: Preferred choices for savings and investment accounts, by gender, September 2007

Figure 32: Preferred choices for accounts, by income, September 2007

Figure 33: Preferred choices for accounts, by level of educational attainment, September 2007

The dominance of the traditional model: preferred choices for checking accounts

Figure 34: Propensity to follow traditional banking model, by gender, September 2007

Figure 35: Propensity to follow traditional banking model, by income, September 2007

Figure 36: Propensity to follow traditional banking model, by level of educational attainment, September 2007

Figure 37: Propensity to follow traditional banking model, by work status, September 2007

Trust issues and banks versus brokerage

Figure 38: Trust—banks versus brokerage firms, by gender, September 2007

Figure 39: Trust—banks versus brokerage firms, by age, September 2007

Figure 40: Trust—banks versus brokerage firms, by income level, September 2007

Figure 41: Trust—banks versus brokerage firms, by race, September 2007

Figure 42: Trust—banks versus brokerage firms, by level of educational attainment, September 2007

Is there any difference?

Figure 43: Perception of differentiation, by gender, September 2007

Figure 44: Perception of Differentiation, by income, September 2007

Figure 45: Perception of differentiation, by level of educational attainment, September 2007

Figure 46: Perception of differentiation, by work status, September 2007

Perceptions of Independent Financial Advisors

Independent financial advisors are not used by mainstream America

Figure 47: Independent advisors, usage, by gender, September 2007

Figure 48: independent advisor, usage, by income level, September 2007

Figure 49: Independent advisors, usage, by marital status, September 2007

Figure 50: Independent advisors, usage, by level of educational attainment, September 2007

Figure 51: Independent advisor, usage, by region, September 2007

Mainstream America not likely to trust independent advisors more than banks and brokerage

Figure 52: Trust, independent advisors versus banks and brokerage, by gender, September 2007

Figure 53: Trust, independent advisors versus banks and brokerage, by income level, September 2007

Figure 54: Trust, independent advisors versus banks and brokerage, by marital status, September 2007

Figure 55: Trust, independent advisors versus banks and brokerage, by level of educational attainment, September 2007

Where Do Consumers Like to Invest?

Their money?

Figure 56: Investment preferences, earnings, by gender, September 2007

Figure 57: Investment preferences, earnings, by age, September 2007

Figure 58: Investment preferences, earnings, by household income, September 2007

Figure 59: Investment preferences, earnings, by race, September 2007

Figure 60: Investment preferences, earnings, by level of educational attainment, September 2007

Their retirement savings?

Figure 61: Investment preferences, retirement savings, by gender, September 2007

Figure 62: Investment preferences, retirement savings, by age, September 2007

Figure 63: Investment preferences, retirement savings, by income, September 2007

Figure 64: Investment preferences, retirement savings, by race/ethnicity, September 2007

Figure 65: Investment preferences, retirement savings, by level of educational attainment, September 2007

Figure 66: Investment preference s, retirement savings, by employment status, September 2007

Their inheritance?

Figure 67: Preference for investing an inheritance, by gender, September 2007

Figure 68: Preference for investing an inheritance, by age, September 2007

Figure 69: Preference for investing an inheritance, by income, September 2007

Figure 70: Preference for investing an inheritance, by race, September 2007

Figure 71: Preference for investing an inheritance, by marital status, September 2007

Figure 72: Preference for investing an inheritance, by level of educational attainment, September 2007

Their lottery winnings?

Figure 73: Preference for investing lottery winnings, by income, September 2007

Figure 74: Preference for investing lottery winnings, by race/ethnicity, September 2007

Figure 75: Preference for investing lottery winnings, by level of educational attainment, September 2007

Appendix: Trade Associations