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Insight of the Day: Consumers Are Crowdsourcing Their Financial Services, While Banks Risk Losing Primary Status

Findings:

  • 85% of consumers are satisfied with their primary financial institution (FI).

  • Despite this, consumers are using as many tools or services from other FIs as they are from their primary one.

  • Younger generations are leading this trend, using more than six financial tools/services on average.

  • 37% of consumers don't feel their primary FI tailors offers to their financial situation.

  • 60% prefer self-service banking without human interaction.

  • Gig workers are underserved by their primary FIs and have unique financial needs.

Key Takeaway:

Consumer loyalty to a single financial institution is declining. Customers are diversifying their financial services across multiple providers, driven by a desire for personalization, convenience, and specific tools that cater to their individual needs.

Trend:

The trend is towards a "crowdsourced" approach to financial services, where consumers curate a personalized suite of tools and services from various providers. This is particularly prevalent among younger generations who are comfortable with digital-first interactions and demand personalized experiences.

Conclusions:

  • Traditional FIs risk losing their primary status and the associated lifetime customer value if they fail to adapt to these changing consumer preferences.

  • Personalization, digital-first experiences, and tailored financial solutions are crucial for FIs to remain competitive.

  • The rise of the gig economy presents a unique opportunity for FIs to cater to this growing segment with specific financial products and services.

Implications for Brands (Financial Institutions):

  • Embrace Digital Transformation: Invest in digital platforms and technologies that enable seamless and personalized experiences.

  • Leverage Data: Utilize customer data and insights to offer tailored financial solutions and anticipate customer needs.

  • Expand Service Offerings: Develop a wider range of financial tools and services, especially those that cater to the growing gig worker segment (e.g., credit building, budgeting tools).

  • Self-Service Options: Prioritize self-service options, such as virtual assistants and mobile apps, to meet consumer preferences for convenience and autonomy.

  • Proactive Engagement: Reach out to customers with personalized offers and recommendations based on their individual financial situations.

  • Collaboration: Partner with fintech companies to leverage their expertise and technology to deliver innovative financial solutions.

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