Overview 1
Catalyst 1
Summary 1
Executive Summary 2
10 Trends Identified 2
TREND 1: 'Too big to fail' will drive consumers to the personal and the local 2
TREND 2: Simplicity and certainty will drive the product selections of consumers in 2010 2
TREND 3: Renewed focus on ethics, sustainability and social responsibility will permeate both choice of product and choice of institution 3
TREND 4: Consumers in 2010 will rely on the actions and advice of their peers when making financial decisions 3
TREND 5: Customers will look beyond price to find value 3
TREND 6: Trust and heritage will play an increasing role in brand choice 3
TREND 7: Service must be innovative and flawless 3
TREND 8: 2010 will see a return of the long-term perspective in consumers' FS choices 3
TREND 9: Consumers will drop vanilla products in their search for individualism 3
TREND 10: Consumers diverge in their desires: experiential banking for bespoke issues and efficient pragmatism in their day to day banking 3
Table of Contents 4
Table of figures 5
Table of tables 6
10 CONSUMER TRENDS FOR FS PROVIDERS IN 2010 AND BEYOND 7
Introduction 7
TREND 1: 'Too big to fail' will drive consumers to the personal and local 7
'Move Your Money' campaign gains social media attention 8
INSIGHT: The collapse of the 'big bank' brand will lead to the rise of the local bank 9
2010 will see consumers appreciate smaller local banks and building societies in a bid to deal with someone they feel can better understand them 9
Local banks are still perceived as serving the community, something lacking in the brands of their larger relations 10
INSIGHT: Larger banks can entertain a return to personal banking through treatment tailored to the individual 11
Banks must make better use of customer relationship management tools in order to construct a personal service 11
TREND 2: Simplicity and certainty will drive the product selections of consumers in 2010 12
INSIGHT: Consumers covet stability and, without sufficient trust in the FS community, wish to know more about the products they are purchasing 13
Product presentation has never been more important as consumers are not willing to invest significant time in understanding the prospective offerings 13
Scarcity of information can dissuade the 2010 consumer 15
Consumer and political pressure combine to motivate clear-cut financial instruments and new entrants are already appearing to meet this demand 15
FS providers must focus their literature on the bottom-line product, avoiding smoke and mirrors tactics and instead focusing on results 17
TREND 3: Renewed focus on ethics, sustainability and social responsibility will permeate both choice of product and choice of institution 18
INSIGHT: Consumer demand for ethical FS is looking set to blossom 20
The rallying 2010 consumer looks ready to embrace a more ethical outlook in the recovery 20
The economically important BRIC markets look to be receptive to ethical financial services opportunities while Western reservations begin to change 20
Interest among high net worth individuals is starting to build but providers must increase awareness and trust 21
Consumers will not accept 'green-washed' financial services and will react negatively to a policy facade 22
INSIGHT: Consumers are looking for social empathy from their bank 22
Public perception minefield: JPMorgan versus Goldman Sachs 24
TREND 4: Consumers in 2010 will rely on the actions and advice of their peers when making financial decisions 24
INSIGHT: Digital networks are now bigger than physical ones, and this will continue to impact attitudes towards information in 2010 25
INSIGHT: FS providers will realize the truth about the value of social media 26
Social media will emerge as a trend rather than a fad in 2010 27
Social media will facilitate peer-to-peer recommendations and boost sales through viral marketing 28
INSIGHT: Consumers will look to their peer group for reassurance that they are making the right move 28
Peer emulation can offer fearful consumers, uncertain of which move to make, a well-trodden path 29
TREND 5: Customers will look beyond price to find value 31
INSIGHT: Price is only one small part of the proposition: security, quality, brand loyalty and service must each be respected 32
INSIGHT: FS providers must find the 'value sweet spot' in order to entice the 2010 consumer 33
TREND 6: Trust and heritage will play an increasing role in brand choice 33
INSIGHT: FS brand image was damaged in 2009 as customers lost faith in the FS institution 34
INSIGHT: The importance of branding in FS should not be underestimated and will only intensify in 2010 35
Cross-selling is essential to reaping the rewards of successful branding 35
INSIGHT: Messages generating reassurance will be embraced by a consumer seeking certainty 36
FS providers must emphasize their longevity and heritage to rebuild trust, while showing that they have learnt the lessons of the crisis 36
TREND 7: Service must be innovative and flawless 38
INSIGHT: Financial services must provide the same core services but in a better way 39
Clunky systems must be updated to streamline services 39
INSIGHT: Banks have to distinguish themselves through consistently excellent delivery and problem solving, including technology-led enhancements 40
Mobile banking will begin to take off in 2010 as banks refine their systems to fit better with smartphone services 40
Other technologies will also gain momentum in 2010 as more providers develop the delivery of their offerings 41
TREND 8: 2010 will see a return of the long-term perspective in consumers' FS choices 41
INSIGHT: Financial and emotional factors caused consumers' myopia to intensify during the crisis 42
INSIGHT: As pressures begin to ease, consumers in 2010 will once again look to the bigger picture 43
Many consumers will have drained their savings in order to survive the crisis and are concerned about the longer-term implications 43
Consumers are therefore more aware of the implications of poor saving habits and once they have found their feet can rebuild with a longer-term goal in mind. 43
Longer-term financial services schemes will come under more scrutiny as a consequence of a post-crisis perspective 43
BRIC consumers will want to take advantage of their freshly established economic leadership and ensure they are prepared to meet the challenges of the longer term. 44
TREND 9: Consumers will drop vanilla products in their search for individualism 44
INSIGHT: Personalization in FS acts as an opportunity for consumers to streamline and refine their FS package 45
Consumers see products geared to their specific needs as a priority, allowing them a 'no frills' approach 45
INSIGHT: Providers see personalization as a cost but it could be an opportunity for providers to be able to extract more wallet share 46
Greater individualism is already being reflected in FS rewards packages 46
TREND 10: Consumers diverge in their desires: experiential banking for bespoke issues and efficient pragmatism in their day to day banking 47
INSIGHT: The 2010 consumer is looking for an effective system to manage their finances with little fuss 48
Online banking systems must provide functionality from the outset 49
If online platforms do not meet standards then consumers have other options in the form of personal financial management systems 50
INSIGHT: Consumers will desire more from the banking experience when they head in-branch, both from the branch experience and the higher-order services on offer 51
The branch environment itself must elevate the experiential element of banking 51
2010 entrants must seize the opportunity to adopt the branches of the future today 53
THE 10 TRENDS GOING FORWARD 54
Big bank fears are a recessionary hangover but could be longer lasting if banks do not act 55
Regulatory pressures and consumer preference could drive product simplicity into the medium term 55
Socially responsible FS is an unavoidable consequence of a wider social transition 55
Social media's involvement in consumer behavior is only just beginning to realize its potential 56
Value will remain the benchmark against which FS propositions are judged 56
FS branding has risen in significance and will persist 56
Delivery still remains to be defined 56
The long-term perspective will be fleeting as government cuts damage the consumer wallet 56
Personalization will pick up steam as business systems increase in sophistication 57
Divergent banking is the future of customer relations with banks 57
APPENDIX 58
Methodology 58
Further reading 58
Ask the analyst 59
Datamonitor consulting 59
Disclaimer 59
List of Tables
Table 1: Average response for trust in various types of FS institution, where 5 is high trust and 1 is low trust 29
Table 2: FS brand value collapsed in 2009 and must be rebuilt in 2010 35
List of Figures
Figure 1: 10 consumer trends for FS providers 2
Figure 2: Consumers are put off by the Big Bank brand 8
Figure 3: Community banks marketing their personal relationships look to re-engage the jaded consumer 10
Figure 4: The vision of customer relationship management is not being fulfilled 12
Figure 5: Simplicity of product and clarity of information will appeal to the recovering consumer 13
Figure 6: Consumers are grossly uninformed when it comes to important financial variables 14
Figure 7: Although the financial world in general has failed to inspire consumers interests, consumers are paying more attention to banking literature than before the downturn 14
Figure 8: Consumers are no longer passive about their finances; they are very conscious of their importance and as such will devote time to their analysis 16
Figure 9: Virgin Money is approaching the market with ease and simplicity as a central part of its offering 17
Figure 10: Canadian bank Presidents Choice Financial showcases its products with brevity and uses language that the consumer understands 18
Figure 11: Social responsibility and an ethical outlook are becoming increasingly important in FS 19
Figure 12: Brazilian, Indian and Chinese consumers are embracing ethical/green credentials 21
Figure 13: The Co-operative Bank has gained favor through its socially responsible outlook 23
Figure 14: Digital networks will form a social community that FS institutions would be foolish to ignore 25
Figure 15: Our digital networks are now bigger than our physical ones 26
Figure 16: FS providers hold false beliefs about the value of social media but these will change in 2010 27
Figure 17: Social media can boost sales via a number of channels 28
Figure 18: New tools offer consumers easy ways to compare their financial decision-making against that of their peers 30
Figure 19: Blippy allows Twitter users to review the spending of their peers 31
Figure 20: Value will stay centre stage in 2010 32
Figure 21: Consumers are looking for more than price in 2010 32
Figure 22: FS branding will be essential to attracting consumers in 2010 34
Figure 23: First Direct provides peace of mind to the consumer through a transparent feedback system 37
Figure 24: C. Hoare & Co effectively emphasizes its heritage, conveying the Megatrend of Authenticity 38
Figure 25: Changing technologies will make flawless delivery essential 39
Figure 26: Barclays PINsentry fails to reach a balance between security and ease of delivery 40
Figure 27: Consumers will use the recovery to take stock of their long term goals 42
Figure 28: Consumers will seek out the ability to pick and choose services and packages that meet their specific needs 45
Figure 29: ZYNC from American Express provides an example of customers being allowed to mold FS products to their needs 47
Figure 30: Experiential branch experience will play an important role in a developed proposition 48
Figure 31: Consumers highlight in-branch preference as one of the main reasons for not using online banking 49
Figure 32: Barclays' online banking marketing focuses on the ease of control 50
Figure 33: Mint offers efficient and encompassing banking services 51
Figure 34: Citibank's vision of branches of the future 52
Figure 35: Italian Bank Che Banca creates a destination out of bank branches 53
Figure 36: Banks must move their in branch service up in the experience stakes 54
Figure 37: Although all significant in 2010 each trend will vary in its long-term impact 55