The 2021 winter holidays may be shaping up as the season of “buy-now, pay-later” (BNPL) payment options. BNPL services are already popular, and they continue to gain traction in the financial-services payment market. Fintech companies and traditional credit card issuers offer a variety of options to consumers for making purchases. Recent research from Phoenix Synergistics (a unit of Phoenix Marketing International) reveals that four in ten consumers have used some type of BNPL payment option. This is just one of the findings from Fintech: Competitors or Collaborators?, a Phoenix Synergistics study based on a nationwide survey of 2,000 consumers age 18 and older.

Younger consumers are more likely to report they have ever used BNPL to make a purchase at a store or through a retailer’s website or mobile app. Incidence is highest among Gen Z consumers, with two-thirds indicating usage. Among Millennials, six in ten are users. Incidence of usage among the other generations declines sharply. More than one-third of consumers with household income less than $100K report using BNPL, and usage spikes among those with household income of $100K or more. BNPL users are as likely to report using the service online as they are to say they have used it in a physical store. Eight in ten users believe that BNPL is a very/somewhat valuable service.

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What is the relationship between BNPL and credit cards? Respondents who do not have credit cards are more likely than cardholders to have used BNPL, suggesting that the service may be filling the credit gap for card non-holders.

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Bill McCracken, president of Phoenix Synergistics, stated, “Buy-now, pay-later services are an interesting phenomenon in the payments market. Merchants are jumping on the bandwagon and offering these services from a variety of new players in the market. Now, traditional credit card issuers are entering the market with their versions. The service is very popular with consumers, particularly in the younger generations. There is widespread appeal, but there are also critics of these services. Concerns about delinquencies and defaults are often voiced. The relationship with credit cards is an issue to be considered. It is anticipated that BNPL usage will increase substantially in the 2021 holiday shopping season, given the popularity of the product as well as concerns about inflated costs of goods and services. Payments providers—including traditional credit card issuers and the new BNPL providers—need to monitor usage and developments on this payments frontier.”

These are among the findings from a recent Phoenix Synergistics report, Fintech: Competitors or Collaborators?, which features responses from 2,000 online interviews with consumers age 18 and older.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

 

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This article was published by The Financial Brand

After being out of favor among lenders for a couple of years, the home equity business is heating up again. Financial institutions that want to deploy the massive surplus deposits they have and not get left behind must step up their digital strategies on this front or get ignored by digitalized consumers.

Traditionally a product many homeowners looked to local branches for, consumers are increasingly applying for home equity lines of credit through mobile and online channels, according to the annual Home Equity Lending Monitor from Phoenix Synergistics.

Financial institutions that don’t adapt to this market preference for digital access, and which also fail to actively cross-sell home equity credit, run the risk of missing out on a lending opportunity that appears to be coming, suggests William McCracken, President at the research firm.

The urgency to move on this is underscored because many institutions remain flush with more money than they know what to do with, he adds. Unlike mortgages, which banks and credit unions typically sell into the secondary mortgage market, home equity credit is generally held by lenders.

The fintech Rocket Mortgage (formerly known as Quicken Loans) has already become the largest primary mortgage lender in the U.S. While Rocket doesn’t currently promote home equity credit, something that should prod traditional lenders is that Phoenix Synergistics’ research has found that about three-quarters of home equity line of credit (HELOC) borrowers typically open their credit lines with their primary mortgage lender. And that may no longer be a bank or credit union.

In fact, McCracken says he has been surprised that more traditional financial institutions that offer mortgages don’t take advantage of this tendency. To him, it’s low-hanging fruit that many inexplicably aren’t reaching for. The firm’s study found that only about one out of four homeowners with a HELOC were approached to open a line by their primary mortgage lender. This may reflect the fact that some of the largest mortgage lenders, such as Chase Mortgage, had paused HELOC efforts for a time.

While fintechs haven’t made a significant dent in HELOCs yet, according to McCracken’s data, the planets are lining up for them.

Portion of U.S. homeowners using some form of home equity credit

Already, the company’s research indicates that 27% of homeowners surveyed have either a HELOC or a home equity loan. As the chart above illustrates, this is the highest level in years. The credit lines are much favored over the loans for their greater flexibility, according to McCracken.

All these issues come at a point when interest in home equity credit, chiefly home equity lines of credit carrying floating interest rates, are becoming more attractive again.

What’s Favoring a Surge in Home Equity Lines of Credit

In an interview with The Financial Brand McCracken pointed to a number of factors that favor reentry into this business, in a digital way.

A key one is rising home prices.

“If you have had your home for at least a few years, you are equity rich,” says McCracken. “Rather than refinancing to get cash out, you have an opportunity to access an equity line that will let you draw out only as much as you need.”

Nationally, home prices rose year-over-year by 18% in September 2021, according to CoreLogic Home Price Insights. This is partially due to an ongoing housing supply shortage, the firm said. There are areas at risk for price drops. And the high rate of growth won’t go on forever, but McCracken’s point is that there’s equity to be tapped now. He notes that Freddie Mac is predicting a 5.3% rate of price growth for 2022.

Inflation is going to tamp down demand for refinancing.

McCracken says his research indicates that 45% of homeowners have refinanced in the last two years and that another 35% expect to refinance over the next 12 months.

“If that bears out, 80% of all homeowners will have refinanced over a three-year period,” says McCracken. “So that tells you that the pool for refinancing is going to be quite small, because no one will want to refinance as rates are edging up.”

HELOC rates are generally much lower than those of unsecured personal loans and credit card loans, McCracken points out. This will make them attractive for people looking for major personal credit.

Working from home will create additional demand for credit.

While many companies have been trying to bring their staffs back to the office, working from home has become an option for many Americans. McCracken says that now that this trend has gone beyond a temporary measure, more people are looking to beef up their space. This includes home improvements, extensions, additional or better furniture, and more.

“That kind of spending lends itself to home equity borrowing,” says McCracken. A plus for home equity credit is that for people who itemize their taxes the interest can still be tax-deductible, subject to limits, something that you don’t get if you obtain personal loans or rely on credit cards.

Local lenders have enjoyed some advantages in HELOC lending but this time around there may be a limited window of opportunity, according to McCracken.

Opportunistic fintechs are one risk. Another is the return of major league competitors.

At the start of the pandemic some large HELOC lenders were worried about potential risks and shut off the spigot. McCracken thinks they will be opening it wide again.

“I think a lot of the traditional lenders who have been completely on the sidelines or at least taking a less-aggressive marketing stance on home equity are going to realize, ‘Oh my gosh, look at how much wealth is now sitting in homes, and what borrowers could do with the funds’.”

— William McCracken, Phoenix Synergistics

Harvesting HELOC Potential Will Demand Digital Applications

Having a robust digital process for taking home equity applications has become a “must-have,” according to Phoenix Synergistics’ research.

McCracken points to two aspects of the annual study.

Channels borrowers use to apply for home equity lines of credit

The first are the channels that consumers told researchers that they have actually used when they applied for home equity credit. Applications taken via digital channels have pulled ahead of applications taken in bank branches or other offices. The younger the consumer, the more likely they took either the mobile or online route, or some combination of both.

Channels borrowers would prefer to use to apply for home equity lines of credit

What is more dramatic is the way the future is shaping up. The first chart is in the past tense, that is, it is how home equity borrowers obtained their loans, which reflects the way things had been over the last few years.

On the other hand, what institutions need to adhere most closely is how people want to apply in the future.

Looked at in this way, willingness to go to an office to obtain home equity credit is dwindling away. Less than a third of the study respondents are willing to do that.

“Home equity credit is really an older product, but it’s kind of in a new package today, in terms of how it’s going to be accessed,” says McCracken. “Instead of going to a branch to talk to someone, it’s gravitating to filling in a form after dinner on your laptop or your phone.”

The recent environment for deposit acquisition and retention has been extremely unusual. For the first time in a number of years, the personal savings rate of consumers increased. Some industry analysts described the situation as a “coronavirus deposit bonanza.” Consumer spending declined during the first phases of the pandemic, and consumers parked funds in deposit accounts while waiting for the right time to spend and/or make changes to investments. Recent research by Phoenix Synergistics revealed that a majority of consumers made changes to their checking, savings, or investment accounts in the past year. While no specific activities were dominant, these moves resulted in changes in net flows for various types of financial institutions. These are among the findings from Competing for Deposits: Acquisition and Retention Strategies, a recent report from Phoenix Synergistics (a unit of Phoenix Marketing International). A highlight of the study is a nationwide, online survey of 2,000 consumers ages 18 or older.

A small majority (51%) of consumers indicate that they made major changes in their savings and investment accounts in the past year (up from the 20% who reported doing so in a 2018 Phoenix Synergistics study). Fairly equal numbers moved funds in secure deposit accounts from one institution to another or moved funds from conservative accounts (e.g., savings accounts, money market deposit accounts, or CDs) to checking accounts to use for household expenses. Younger consumers are more likely to have moved funds from conservative accounts to stocks or mutual funds and to have moved money invested in stocks and mutual funds from one institution to another. Consumers who made major changes to their accounts in the past year identified a variety of factors that motivated these moves, including seeking better returns or interest rates, uncertainty about the economy, advisors’ recommendations, and pandemic-related economic pressures.

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Those who made changes to accounts were questioned about the types of institutions they moved funds from and the types they moved funds to. Banks and savings institutions were the top institutions for both outflows and inflows. However, the number of consumers moving funds out of banks or savings institutions was greater than the total number moving funds in, which resulted in negative net movement. Credit unions and mutual fund companies experienced net outflows. Internet-only banks (without café-style branches) were the only type of institution experiencing net inflows. In general, younger consumers were more likely to report moving funds among the various types of institutions.

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Bill McCracken, president of Phoenix Synergistics, stated, “While the overall incidence of consumers that engaged in major changes in savings and investments has increased, no one type of activity is dominant. Consumers are moving money to and from a variety of accounts and institutions as they emerge from the early stages of the pandemic. However, when money movement has occurred, it has resulted in modest declines for traditional depository institutions, including banks, savings institutions, and credit unions. The winners, in terms of positive net flows, are internet-only financial institutions—a growing competitive force for branch-based providers to contend with. Traditional FIs must meet the challenge across all relationship aspects—including pricing, channels, and customer service—and must proactively communicate with and educate consumers about product changes and improvements. Deposit acquisition and retention is the lifeblood of branch-based depository institutions.”

These are among the findings from a recent Phoenix Synergistics report, Competing for Deposits: Acquisition and Retention Strategies, which features 2,000 online interviews with consumers ages 18 or older.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

For More Information on This Report Click Here

Homeowners are increasingly using online platforms for a variety of purposes when obtaining home equity loans or lines of credit. Online activities range from obtaining information to actually applying for the product. This is in sharp contrast to the time when home equity lending was introduced and the process was completed entirely in person at branches or offices. Today, home equity lenders must have their online systems ready to provide up-to-date product information and offer homeowners the ability to apply via computer or mobile phone. These are among the findings from the 2021 edition of the Home Equity Lending Monitor, a study conducted annually by Phoenix Synergistics (a unit of Phoenix Marketing International). The Monitor is a comprehensive examination of the market from the consumer’s perspective and includes an online survey of 2,500 homeowners.

Current holders of home equity lines of credit (HELOCs) were asked about the channels they used to obtain information about HELOCs. Branches were the top channel for information, followed by the internet using a mobile phone and the internet via computer. Usage of the internet (via both mobile phone and computer) to obtain information has increased when compared to 2020.

Channels Used to Obtain HELOC Information (2017-2021)

Current holders of HELOCs were also questioned regarding the channels they used to apply for the product. More than half (54%) report they applied online, which represents an increase from 36% in 2020. Usage of computers and usage of mobile phones are about equal. Homeowners in the 18 to 49 age segment are more likely to indicate they applied via mobile phone. In-person application is indicated by close to half (49%), declining from 60% in 2020. Mail follows, and at the bottom are various telephone channels. On average, HELOC holders used 2.0 channels when applying for their line of credit.

Channels Used to Apply for HELOCs

Online channels also dominate application preferences among HELOC prospects. More than four in ten cite some type of online method as their preferred application channel. Applying online by computer is preferred by one-quarter of prospects. Slightly more than one-quarter would prefer to apply in person.

Bill McCracken, president of Phoenix Synergistics, stated, “After many years of primarily in-person applications, the home equity lending market is now largely online. Online platforms are essential as information sources and as application channels. Mobile phones are an especially important channel for younger homeowners. Home equity lenders must make sure the online information about their products and services is up to date and comprehensive. Online application channels need to be available and be made as seamless as possible. The home equity lending market now feels at home with online channels.”

These are among the findings from the Phoenix Synergistics 2021 Home Equity Lending Monitor. This twenty-first-annual installment of the study surveyed 2,500 homeowners—including 1,125 holders of home equity lines or loans, 375 home equity credit prospects, and 1,000 home equity credit rejecters. The Home Equity Lending Monitor is the most comprehensive home equity lending study available, profiling and tracking consumer behavior, attitudes, and trends in the market for home equity loans and lines of credit.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

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One likely side effect of the pandemic is the small business credit market being nudged online. Small businesses are increasingly using online channels for a variety of credit activities, beginning with the shopping process and obtaining information about credit services. For small businesses, the ability to monitor credit activity online is an important factor when selecting a credit provider. In addition, more small businesses are applying for credit online. These are among the findings from Small Business Credit and Lending, a recent study conducted by Phoenix Synergistics (a unit of Phoenix Marketing International). A highlight of the study was a national, online survey with 1,000 owners and executives of small businesses with annual sales of $50,000 to $5 million.

When small businesses were asked about their most preferred method for obtaining information about credit services, online via PC was most likely to be preferred when shopping for both loans/lines of credit and credit cards.

Small businesses indicated that the ability to view their credit activity online is an extremely important factor when selecting a credit product. This feature tops the list of important factors and is followed by a fixed rate and the ability to make credit payments and obtain advances online. Two of the top-three product-selection factors involve online access.

When it comes to applying for credit, online via PC was again the most preferred method. Small businesses are most likely to cite online via PC as the most preferred channel for applying for both loans/lines of credit and credit cards. In-person at a branch is the second-most-preferred channel. A variety of channels follow these two top mentions.

When small businesses that have applied for credit were asked about their most-recent application experience, online via PC was the top channel to have been used, followed by in person at a branch. Three in ten (29%) credit applicants most-recently applied for credit online using a mobile device, which is significantly higher than the 6% who applied using a mobile device in 2017. In 2021, a large majority (80%) of those applying online (via PC or mobile device) indicated that the entire process was completed online.

Non-traditional and non-bank online lenders are a significant factor in the small business credit market. A majority (60%) of small businesses have borrowed from a non-traditional lender, such as an e-commerce company, a non-bank online lender, a logistics company, or a supplier. This represents an increase from 40% in 2017. In 2021, small businesses that have borrowed from non-bank online lenders are most likely to cite PayPal (58%) as a platform/service they have used.

Bill McCracken, president of Phoenix Synergistics, stated, “The small business credit market is clearly becoming an online market. It is essential for lenders to provide a robust and seamless online experience for small business credit customers across all types of online devices—computers, mobile phones, and tablets. This experience must be all-encompassing—from providing information about credit services to providing the ability to view credit activity online to facilitating online credit applications. The competitive threat posed by non-traditional and non-bank online lenders is strong, and traditional small business lenders cannot be caught unprepared for this new online world of small business lending.”

These are among the findings from a recent Phoenix Synergistics study, Small Business Credit and Lending, which features 1,000 online interviews with owners and executives of small businesses with annual sales of $50,000 to $5 million.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

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Sales activity at financial institution branches experienced an uptick over the past year. The incidence of consumers who experienced cross-selling at branches increased, which resulted in sales of additional financial products and services. Consumers are shifting away from applying for accounts and services with branch personnel to applying via self-service devices in branches. These are among the findings from the 2021 edition of the Consumer Branch Monitor, a study conducted annually by Phoenix Synergistics (a unit of Phoenix Marketing International). The study included a nationwide, online survey of 2,000 consumers ages 18 or older.

When branch users were asked about the acceptability of cross-selling at branches, a significant majority (80%) say it is acceptable for a teller or other representative to ask them about their interest in additional products while they are at a branch conducting other business. Four in ten (43%) indicate cross-selling would be “very acceptable,” representing an increase from 35% in 2020. Branch users ages 18 to 49 are more likely than older branch users to find cross-selling “very acceptable.”

In addition to the growing acceptability of cross-selling, there has been an increase in the number of branch users experiencing cross-selling while at the branch. A majority (53%) of branch users indicate that a teller or representative has suggested a new product or service while they were at their primary branch. Branch users ages 18 to 49 and those with household income of $100K or more are more likely to indicate they have been cross-sold products at a branch. Four in ten (39%) branch users requested additional information about products or services in response to cross-selling, and one-third (32%) ultimately applied for a product or service. Incidence of both of these activities has increased when compared to 2020.

A significant number of branch users report that, in the past year, they have participated in some type of activity at a branch to obtain information about a product or service in which they had interest. This is particularly true among branch users in the 18 to 49 age segment. Branch users report a wide range of information-gathering activities, including speaking to a branch representative, using appointment banking, and picking up brochures about products and services.

While sales activity at branches is increasing, methods of applying for accounts and services at branches are shifting. Overall, more than one-third (35%) of consumers indicate they opened a new account or service in the past year (up from 27% in 2020). Among these, close to half (49%) report applying at their primary branch (unchanged from 2020). Of those applying at a branch, a majority (56%) did so with branch staff (down from 67% in 2020). Meanwhile, incidences of using several types of self-service devices to apply for accounts and services in branches increased when compared to 2020.

Bill McCracken, president of Phoenix Synergistics, stated, “The concept of the branch as a sales center has been talked about for years. Evidence from our research indicates that branch sales activity, in the form of cross-selling, is indeed increasing. However, in an unusual twist, those opening accounts and services at branches are increasingly using self-service devices to apply, while usage of branch personnel when applying has declined. Financial-services providers need to monitor branch sales activity, particularly the in-branch methods that consumers use to apply for accounts and services, as they design and implement branch transformation and configuration strategies.”

These are among the findings from Phoenix Synergistics’ latest study, Consumer Branch Monitor 2021, which features 2,000 online interviews with consumer financial decision-makers ages 18 or older.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

For More Information on This Report Click Here

 

This article was published by Finextra

Mastercard is to phase out the magnetic stripe from all of is debit and credit cards, ditching an anachronistic payment method that has been redered obsolete by the emergence of chip-based cards.

An early 1960s innovation largely credited to IBM, the magnetic stripe allowed banks to encode card information onto magnetic tape laminated to the back. It paved the way for electronic payment terminals and chip cards, offering more security and real-time authorisation while making it easier for businesses of all sizes to accept cards.

A fixture on billions of payment cards for decades, the thin strip has finally reached its expiration date, with Mastercard becoming the first payments network to phase it out.

As contactless and biometric payment cards become the norm, newly-issued Mastercard credit and debit cards will not be required to have a stripe starting in 2024 in most markets. By 2033, no Mastercard credit and debit cards will have magnetic stripes, which leaves a long runway for the remaining partners who still rely on the technology to phase in chip card processing.

The US had been the last major market to convert to chip cards, necessitating the continuation of magstripe technology – and all the security liabilities that came with it. But with the rollout of chip cards to the US market almost complete, merchants, banks and consumers have quickly come to appreciate the faster chip checkout process and improved security.

More than half of Americans prefer using a chip card payment at a terminal over any other payment method, with security being the driving factor, according to a December survey for Mastercard by the Phoenix Consumer Monitor. That was followed by contactless payments — with a card or a digital wallet. Only 11% said they preferred to swipe, and that drops to 9% when looking at cardholders with experience using contactless payments.

And in a July study by Phoenix, 81% of American cardholders surveyed reported they would be comfortable with a card that does not have the magnetic stripe, and 92% would increase or keep usage of their cards the same if the magnetic stripe was no longer on the card.

The pandemic has also been a driving factor in chip card usage. In the first quarter of 2021, Mastercard saw 1 billion more contactless transactions compared to the same period in 2020, and in the second quarter of 2021, 45% of all in-person checkout transactions globally were contactless.

John Drechny, CEO of the Merchant Advisory Group, which represents more than 165 US merchants, comments “We applaud Mastercard for taking this next step to help to strengthen payment security and protect merchants and consumers from risk. We’d like to see others in the industry move in this direction.”

In the wake of the pandemic, an unsettling economy, and increased merger and acquisition activity, financial-services providers have accelerated their evaluation of how today’s bank branches should look and operate. Many consumers prefer bank branches that are casual, streamlined, and café style. In addition, consumer response to smaller, limited-staff facilities and fully automated facilities is increasingly positive. These are among the findings from Consumer Branch Monitor 2021, a study by Phoenix Synergistics (a unit of Phoenix Marketing International). The Consumer Branch Monitor has been conducted annually since 2020 and includes a national, online survey with 2,000 consumers ages 18 or older.

Many branch users indicate that their current primary branch is a full-service, fully staffed branch, yet many are warming to various alternative branch configurations. Approximately two-thirds (67%) of branch users report that their primary branch provides full services and is fully staffed (down slightly from 71% in 2020). Branch users ages 50 or older are more likely to indicate that their primary branch is a full-service facility. Younger consumers are more likely than older consumers to use various types of alternative branch facilities.

When asked about the appeal of various alternatives to fully staffed branch configurations, the largest number (73%) of branch users say a casual facility is very/somewhat appealing. This is followed by a supermarket branch (61%) and a branch with limited staff and self-service devices (59%). A fully automated branch with no staff is appealing to slightly more than half (54%) of branch users. Positive response to supermarket branches, branches with limited staff and self-service options, and fully automated branches has increased since 2020.

Many consumers also find café-style branches valuable. Slightly more than four in ten (44%) branch users report that one of their financial institutions has café-style branches (up from 24% in 2020). One-third (34%) of branch users indicate that they have visited a café-style branch (up from 18% in 2020). Almost all (93%) of those who have visited a café-style branch find them to be valuable, with two-thirds (68%) reporting they are “very valuable.”

A variety of features of café-style branches are appealing to those who find these facilities valuable. A more relaxed atmosphere (48%) tops the list and is followed closely by liking coffee, drinks, and snacks being available for customers (46%). A notable minority (42%) report that the café-style atmosphere makes them feel more connected to the financial institution.

Many younger consumers seem to indicate that traditional branch facilities are “so yesterday.” When branch users are asked to describe the type of branch style they prefer, “comfortable and casual” (44%) is most widely cited, followed by a “traditional and conservative” branch (28%) and a “modern and high-tech” facility (23%). Those in the 18 to 49 age segment are significantly less likely to say “traditional and conservative.”

Bill McCracken, president of Phoenix Synergistics, stated, “It is clear that many consumers prefer branches that are more in tune with a casual lifestyle. Smaller branches with more automation are increasing in appeal, as are facilities with limited or no staff. Consumers’ usage of café-style facilities, similar to a Starbucks, is increasing. These branches or cafés have features that encourage customers to relax and stay awhile. In particular, many younger consumers—who are more apt to be branch users and to be in the market for financial services—find these innovative facilities attractive. When designing new branches and updating existing branches, FIs need to recognize that branches need to transition from the traditional, conservative model to branches that better reflect the needs and attitudes of today’s consumers.”

These are among the findings from Phoenix Synergistics’ latest study, Consumer Branch Monitor 2021, which features 2,000 online interviews with consumer financial decision-makers ages 18 or older.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

For More information on this report click here.

This mention was published in Cynopsis Media

In the News

“It’s like if somebody is running the 100 meters and they have a weight around their ankles,” former Olympics host Bob Costas told the New York Times, of shrinking viewership for the Games this summer. “That is not a fair judge of their speed.” NBCUniversal paid over $1 billion for an event slammed by the pandemic, the shift to streaming and the absence of some star athletes, drawing about half the viewership of the 2016 Games in Rio. Still, NBCU expects the Games to turn a profit, with ad sales higher than 2016. Throw in digital and social, and through Wednesday night, more than 100 billion minutes of Tokyo Olympics content had been consumed across NBCUniversal platforms.

But it’s not just about the numbers – advertisers are benefitting from their connection to the Olympics, notes NBCU. In a survey, the company found 69% of consumers said that brands that support the Games by advertising are helping the world come back together after the pandemic, and 2 in 3 respondents say the brands are helping bring families together (65%). NBC Prime Olympics coverage continues to outperform prior year brand norms, according to Phoenix MI, with a +15% lift in brand recall, and a +21% lift in message breakthrough.

This release was featured in Quirk’s Daily News Queue, Yahoo Finance, ResearchLive, MrWeb Daily Research News, Insights Association, and AiThority.

NEW YORK, August 4, 2021 – Global Advertising and Brand Specialist Phoenix Marketing International (Phoenix MI) today announced the acquisition of research-based advertising consultancy Communicus, which provides insights into how advertising campaigns build brands and motivate purchasing.

“This acquisition will allow us to integrate Communicus’ exceptional longitudinal advertising research system into our end-to-end advertising solutions,” said Allen R. DeCotiis, Ph.D., Chairman and Chief Executive Officer of Phoenix MI. “This powerhouse combination will empower our clients to make smarter advertising and brand positioning decisions and offer an unmatched level of understanding of how advertising works in-market.”

Communicus’ unique System 1-based diagnostic approaches to advertising research enable clients to gain a deep understanding of how all campaign elements are working together to drive in-market results for the brand.

“We are thrilled to be bringing the Communicus capabilities into the Phoenix Marketing organization, ” comments Jeri Smith, CEO at Communicus. “The Communicus in-market 360-degree campaign evaluation system is a perfect complement to the Phoenix suite of products, enabling us to provide clients with best-in-class solutions across the entire advertising research needs set.”

Martha Rea, President of Phoenix MI adds, “At Phoenix, we are continuously seeking out ways that we can advance our capabilities and unique solutions to better serve our clients. Communicus’ implicit approach to advertising research will dovetail our existing System-1 framework, Dimensions, to provide clients with profound insights into how their advertising is performing and impacting their brands.”

Phoenix will be unveiling its elevated end-to-end advertising communications solution at The Quirks Event this Fall.

About Phoenix Marketing International

Phoenix MI is one of the Top Research Firms in the U.S. (GreenBook Market Leaders Report) and is one of the fastest-growing Market Research firms in the world. Operating in all major industries, Phoenix utilizes modern technology, innovative research techniques, and customized approaches to help our clients elevate their brand, refine their communications, and optimize their customer experience. Founded in 1999, Phoenix has over 400 employees across seven offices in the US, as well as offices in Hamburg, Shanghai, Mexico City, and London. Learn more about how Phoenix can be put to work for your business at phoenixmi.com.

This mention was published in Cynopsis Media

In the News

The opening ceremony for the Tokyo Olympics drew a US broadcast audience of 16.7 million, according to early data, down 37% versus the 2016 Games in Rio de Janeiro, and down 59% since the 2012 Olympics in Beijing. But the ceremony delivered significant impact for brands, according to Phoenix MI data comparing A25-54 numbers versus prior year benchmarks. Brand recall and message memorability were up +39% and +31%, respectively, vs. all brands in the 2016 Rio Opening Ceremonies, and brand recall and message memorability were up +25% and +21%, respectively, vs. the same brands’ prior year norms. “Enjoying the Games is not a linear sprint, but a multi-screen relay – and we know our platform will deliver for advertisers in delivery and impact,” said Mark Marshall, President Advertising and Partnerships, NBCUniversal. “Our teams are speaking to our partners every single day to ensure we help them achieve their goals throughout the Games.”

The first full day of the Olympics rose 26% from the Opening Ceremony the night before, delivering an 8.2 HH rating across NBC, USA Network, NBCSN and CNBC, according to Nielsen. NBC reported its streaming service, Peacock, notched its most-consumed Saturday since launch, and NBC Sports Digital set a record for the most streamed Olympics primetime show ever, averaging 648,000 viewers per minute.

Total US TV ad spending will decrease 4% to $60.6 billion in 2021, grow to $63.2 in 2022 and stay flat in 2023, projects Zenith. The media agency forecasts a rise to $15.3 billion in 2021, up from $14.7 billion last year, with spending flat at $15.5 billion for 2022 and 2023. Meanwhile, internet video spending in the US is expected to rise 40% to $34.2 billion in 2021, climbing to $38.7 billion 2022 and $43.3 billion in 2023. “This year has seen a return to growth, for brands and for the ad market, fueling a significant boost for most areas of ad spend,” said Lauren Hanrahan, CEO of Zenith. “Online video and other digital media have seen some of the biggest increases as audiences continue their digital migration to connected TV, streaming services, ecommerce, and social platforms. We predict this will continue, with advertisers following consumers with their investments.”

Tiered platforms, allowing viewers to choose between a paid, ad-free option and a less expensive (or free), ad-supported option, appeal to the largest cross-section of viewers, according to Hub’s new “Monetization of Video” study. “It’s true that some TV viewers will do almost anything, including paying a premium, to avoid ads. But there are many who will choose ad-supported TV if it saves money or lets them watch a show they can’t watch somewhere else,” said Jon Giegengack, one of the study authors. “Tiered plans give viewers control of their experience. Whether they watch with ads or not, everyone is getting an experience they chose, and not one chosen for them.”

 

This release was featured in Insights Association, Quirk’s Daily News Queue, and MrWeb.

NEW YORK, July 30, 2021 – Global Advertising and Brand Specialist Phoenix Marketing International (Phoenix MI) is excited to welcome Kevin Wood as Senior Vice President, Business Consulting.

Wood joins Phoenix with over 20 years of experience in advanced data analysis and modeling, transforming big data into actionable insights, and focusing on digital tools and applications to drive sales and market position.

Prior to joining Phoenix, Wood was the Senior Vice President at a large research company, where he led a team focused on the needs of Media Platforms and helping them better understand their audiences, optimizing content to drive adoption and usage, and increasing the monetization of their platform.

“I look forward to continuing my work on advertising effectiveness and positioning as well as helping digital platforms better monetize,” said Wood. “Phoenix Marketing International is already recognized for its expertise in these spaces, and I’m excited to expose more brands to the connective solutions Phoenix offers.”

Wood holds a bachelor’s degree in Materials Science & Engineering from the University of Arizona.

About Phoenix Marketing International

Phoenix MI is one of the Top Research Firms in the U.S. (Top 50 Market Leaders Report) and is one of the fastest-growing Market Research firms in the world. Operating in all major industries, Phoenix utilizes modern technology, innovative research techniques, and customized approaches to help our clients elevate their brand, refine their communications, and optimize their customer experience. Founded in 1999, Phoenix has over 350 employees across seven offices in the US, as well as offices in Hamburg, Shanghai, Mexico City, and London. Learn more about how Phoenix can be put to work for your business at phoenixmi.com.

Many mass affluent consumers want advice on investing activity. While consumers in this segment tend to perceive themselves as self-directed investors, a significant number do use the services of investment advisors. The recent pandemic has motivated some mass affluent investors (particularly younger investors) to retrench from more-aggressive investments. A large number of mass affluent consumers have specific financial goals that require financial advice and guidance. These are among the findings from The Mass Affluent and Evolving Investment Strategies, a recent study by Phoenix Synergistics (a unit of Phoenix Marketing International). The study included a nationwide survey of 1,500 mass affluent consumers with investable financial assets of $100,000 to $1 million.

When questioned about their approach to investing, a significant number of mass affluent consumers report that they either make decisions themselves or only occasionally consult an advisor. Overall, half (52%) indicate an independent approach to investing. Those in the 18 to 49 age segment are significantly more likely to report an independent approach.

At the same time, a solid majority (74%) of mass affluent consumers indicate they consult some type of financial advisor. One-third (33%) use a specialized financial advisor that works for a financial institution or investment firm. Independent financial planners (23%) and bank branch representatives (21%) round out the top-three types of financial advisors used. Usage of any type of financial advisor is stronger among younger mass affluent consumers.

More than half of those who consult a financial advisor report they have an advisory relationship with someone at their primary financial institution. Incidence of this is significantly higher among those in the 18 to 49 age segment.

Overall, more than eight in ten (84%) mass affluent consumers indicate they need financial advice or guidance related to some type of financial goal or purpose. Retirement accounts/planning and help with selecting savings/investment options top the list.

Beyond the typical financial goals, there is evidence that mass affluent consumers may have immediate needs for advice and guidance about investing in the midst of turbulent market conditions. In response to the market movements during the early stages of the pandemic, three in ten (31% net) reported a seemingly fearful reaction—either reallocating investments to more-secure insured accounts, reallocating funds to less-volatile holdings, or selling holdings to avoid further losses. Younger mass affluent consumers were more likely to report this type of response.

Bill McCracken, President of Phoenix Synergistics at Phoenix MI, stated, “Results from this study provide valuable insights into the investment behavior of mass affluent consumers, who are a key target market for financial-service providers today. Their overall financial goals and their reactions to the pandemic represent opportunities for financial-service providers. This is particularly true for the younger segments of mass affluent consumers. Mass affluent consumers tend to not shy away from using financial advisors, although many think of themselves as being in the driver’s seat making their own decisions. When communicating with these investors, providers should cater to this independent mindset—while providing sound advice, as needed.”

These are among the findings from a recent Phoenix Synergistics study, The Mass Affluent and Evolving Investment Strategies, which features 1,500 online interviews with mass affluent consumers.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

For More Information on this report, click here.

Rewards credit cards have long been a mainstay of the credit card market. In the beginning, rewards credit cardholders were thought to be mainly relegated to “transactors”– or those who spend on credit cards and receive rewards benefits but do not typically incur credit card debt – and particularly higher-income transactors. In past market views, transactors spent more on their rewards cards than “revolvers” – or those who do carry credit card debt. This of course stems from the fact that those carrying credit card debt don’t have the ability to spend as much as those not carrying debt.

Now, we have a completely different view of the rewards market in several respects – based on 8,900 online interviews of credit cardholders interviewed in the 2020 COVID-19 era. Phoenix Marketing International produced the research as part of its ongoing Credit Card Monitor platform.

Increased Importance of Rewards Credit Cards During the Pandemic – Especially Among Those Who Carry Debt on their Rewards Cards

Now, more than ever, rewards credit cards have taken on a greater role in managing a household’s financial affairs. The increased perception of importance is more evident among revolvers than it is among transactors. The study found that 60% of revolvers think that rewards credit cards are more important now than during pre-pandemic months – compared to only 32% among transactors.

For the First Time, the Gap Between Transactor and Revolver Spending Has Narrowed

During the pandemic, the spending level among Gen Z and Millennials earning less than $100K and carrying card debt have outpaced the spending level of their transactor counterparts. This is a reversal of past trends and is no doubt influenced by consumer-directed government spending. It remains to be seen whether this reversal will last or whether it reverts as we move further out into a post-pandemic world.

 

Rewards Card Activity Dominates the Credit Card Landscape Across All Income Levels

“Even among households earning less than $20,000 per year, 82% own a rewards card, and 90% of their spending dollars are charged to these cards”, says Greg Weed, Director of Card Performance Research at Phoenix. He adds, “the idea that rewards card owners do not generally carry balances is no longer the case; 93% of all revolving balance dollars are carried on rewards cards. Across all income brackets, most of the card debt is carried on rewards credit cards”.

 

Market Concentration Forces Have Helped Expand the Availability of Rewards Credit Cards

As with most industries, there is a concentration of market value; not all market segments contribute equally to total market value. The rewards credit card market is no exception. According to Weed, “Using self-reported consumer data, we see that 20% of rewards cardholders contribute 80% of total reported spending dollars. If we look at revolving balance and annual fee dollars, we see the same level of disproportionate market contribution. Since spending, balances (along with APR) and annual fees are some key components to the bulk of issuer revenue, it suggests that interchange, finance charge and annual fee value are delivered by a relatively small segment – comprised mostly of higher-income cardholders and younger cardholders under the age of 55.”

The effect of this concentration has enabled issuers to fund the expansion of rewards cards and benefits to a broader segment of income categories. In other words, higher-income cardholders tend to produce a sufficient level of value to issuers that can fund rewards credit card market growth.

About Phoenix Marketing International

Phoenix MI is one of the Top Research Firms in the U.S. (Top 50 Market Leaders Report) and is one of the fastest-growing Market Research firms in the world. Operating in all major industries, Phoenix utilizes modern technology, innovative research techniques, and customized approaches to help our clients elevate their brand, refine their communications, and optimize their customer experience. Founded in 1999, Phoenix has over 300 employees across nine offices in the US, as well as offices in Hamburg, Germany and London, UK. Learn more about how Phoenix can be put to work for your business at phoenixmi.com.

Small businesses are increasingly using online/mobile devices for a variety of financial activities. Usage of mobile and tablet devices to access business/corporate credit card accounts has expanded significantly. In addition, the incidence of small businesses using online/mobile devices to both make and accept payments is up. Much of the growth in usage of online/mobile services is due to the COVID-19 pandemic. These are among the findings from Credit Cards and the Small Business Market, a recent study conducted by Phoenix Synergistics (a unit of Phoenix Marketing International). The study included a national online survey of 1,000 small businesses with annual sales ranging from $50,000 to $5 million.

Small business credit card holders are increasingly using mobile and tablet devices to manage their business/corporate credit card accounts—including activities like reviewing balances, making transfers, and paying bills. When compared to 2019 data, the growth in usage of mobile phones and tablets to access small business credit card accounts appears dramatic. The incidence of usage of mobile phones increased from four in ten (42%) small business credit card holders in 2019 to six in ten (60%) in 2021. During the same time frame, usage of tablets to access business/corporate credit card accounts increased from close to three in ten (27%) to four in ten (40%) small business credit card holders. Incidence of usage of desktop/laptop computers for this purpose remained stable.

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In addition, small businesses report increased usage of online/mobile payment services due to the pandemic. Most (85%) small businesses indicate they use some type of online or mobile payment service to make purchases or payments. PayPal tops the list of specific services used, followed by Apple Pay and Google Pay. Close to half (46%) of users say they utilized these online/mobile payment services for the first time during the pandemic. An additional one-third (34%) of users report they are using these services more often due to the pandemic.

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More small businesses are also accepting payments from their customers through card readers attached to a mobile phone or tablet. Overall, two-thirds (66%) of small businesses say they accept payments with a mobile card-payment-processing service. Small businesses with annual sales of $50K to $99.9K are more likely to indicate offering this payment method when compared to larger companies in the market. A majority (56%) of users indicate they started using a mobile card-payment-processing service during the pandemic. Three in ten (31%) report increasing their usage of these services during the pandemic. The top mobile card-payment-processing services being used by small businesses are PayPal Here, Square, and PayAnywhere.

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Bill McCracken, president of Phoenix Synergistics, stated, “The pandemic has had a profound impact on small businesses and their usage of online and mobile devices—both to make payments and to receive payments from their customers. Financial-services providers will need to ensure they are offering top-quality mobile services and platforms for their small business clients. Credit card issuers face a challenge from third-party service providers, who are active in both mobile payments and mobile card-payment-processing. It seems likely that usage of mobile in various ways in the small business market will continue to increase in the post-pandemic environment.”

These are among the findings from a recent Phoenix Synergistics study, Credit Cards and the Small Business Market, which features 1,000 online interviews with owners and executives of small businesses with annual sales of $50,000 to $5 million.

For More Information on This Report Click Here

This announcement was featured in Insights Association and the Quirk’s Daily News Queue.

NEW YORK, June 16, 2021 – Global Advertising and Brand Specialist Phoenix Marketing International (Phoenix MI) is proud to announce that they have been recertified to ISO 27001, one of the most widely recognized and internationally accepted information security standards.

“As we look back at the challenges we overcame throughout 2020 and the first half of 2021, we are very pleased to have once again been recognized by this global standard,” said Scott Spry, Chief Operating Officer of Phoenix MI. “We take maintaining our high-security operation standards very seriously and are confident with the rigorous quality processes and security controls we put into place to ensure our clients’ information is safe & secure.”

“The ISO 27001 certification is the global standard for information security management, and we are very proud to once again be one of the few market research firms to maintain this high level of certification,” adds Bill Baird, Chief Security Officer of Phoenix MI.

Phoenix MI achieved its initial certification in June 2018, which is verified annually by CIRQ’s independent audit establishing continued compliance and protection of data.

ISO 27001 provides a framework for companies to manage their data security and establishes requirements for information controls to manage people, processes, and technology. The standard covers both the technological aspects of security as well as corporate security, physical security, etc., and relies on regular risk assessments enabling a company to consistently identify and treat security threats. ISO 27001 is accepted worldwide as an assurance that proper and continual measures have been taken to protect valuable company data.

The scope of Phoenix MI’s certification covers the corporate infrastructure, systems, and services required to deliver market research to its clients and support internal business processes. These include cloud-based services and platforms for the delivery of the research studies, client portals, syndicated product distribution, Corporate Google Workspace, Amazon Web Services, human resources, finance, and project management.

CIRQ (the Certification Institute for Research Quality), an accredited International Standards Organization (ISO) audit and certification body that is a subsidiary of the Insights Association, conducted an in-depth surveillance audit of Phoenix Marketing International’s information security policies and procedures as part of this recertification.

About ISO 27001

ISO 27001 provides requirements for establishing, implementing, maintaining and continually improving an information security management system. The information security management system preserves the confidentiality, integrity and availability of information by applying a risk management process and gives confidence to interested parties that risks are adequately managed. It is important that the information security management system is integrated with the organization’s processes and overall management structure and that information security is considered in the design of processes, information systems, and controls. It is expected that an information security management system implementation will be scaled in accordance with the needs of the organization. This International Standard can be used by internal and external parties to assess the organization’s ability to meet information security requirements. ISO 27001 can be mapped to other information security schemes such as Hitrust, NIST and Soc2. Compliance with the standard also enables a company to meet global security laws, such as the NIS Directive and the GDPR.

About Phoenix Marketing International

Phoenix MI is one of the Top Research Firms in the U.S. (GreenBook Market Leaders Report) and is one of the fastest-growing Market Research firms in the world. Operating in all major industries, Phoenix utilizes modern technology, innovative research techniques, and customized approaches to help our clients elevate their brand, refine their communications, and optimize their customer experience. Founded in 1999, Phoenix has over 400 employees across seven offices in the US, as well as offices in Hamburg, Shanghai, Mexico City, and London. Learn more about how Phoenix can be put to work for your business at phoenixmi.com.

This article was published by The Financial Brand.

Most banks and credit unions have finite resources to invest in new channels. So where would investments best be focused — text and video-based live remote channels or AI-powered ‘bot’ service, including both basic and more sophisticated virtual assistant solutions? New consumer research sheds light on these options.

At some point if enough consumers want chips embedded in their body through which they can conduct or manage their finances, or if they want drones to deliver their crypto-loaded prepaid cards, it will probably happen.

And if it does, it’s a sure bet that there will still be branches, ATMs, voice and more, because in retail banking delivery channels never go away.

Even now channels have multiplied to the point where financial institutions have to figure out ways to prioritize which ones to use to best serve their customers, balancing old ways with new.

Adding to the dilemma, the squeeze put on in-person banking by the pandemic gave new impetus to a range of remote services including live chat, video chat, chatbots (automated response solutions powered by artificial intelligence) and virtual assistants, which use even more sophisticated natural language AI technology to communicate on much wider range of topics.

Banks and credit unions looking to manage this array — on top of branches, ATMs and call centers — would benefit from knowing to what extent consumers use and like these newer remote options. Some useful data has emerged from one of the periodic banking channel studies conducted by Phoenix Synergistics, as part of a new report, “Transforming Channels for the New Digital Reality.”

“How consumers bank in 10 to 15 years is speculation. But right now, and for the near-term future, single-channel financial providers — whether direct banks or branch-centric — will suffer in an environment where consumers are saying, ‘I want it all’.” — Bill McCracken, President – Synergistics, Phoenix Marketing International.

The syndicated research firm conducted the online study among 1,500 U.S. consumers 18 or older in February and March 2021. Phoenix Synergistics President Bill McCracken shared selected data with The Financial Brand.

Surprisingly Strong Satisfaction Levels

The veteran banking researcher says one thing that surprised him in the results was the high usage level of several of these digitally powered channels — particularly video chat, which is quite new compared with text-based chat. Use of both increased by ten percentage points from 2019.

“The use of these new channel technologies shows how consumers are taking the next step in how they interact with their financial providers — particularly, as you would expect, in the 18- 49 age range.

The other thing that surprised McCracken was the very high satisfaction levels reported by consumers. As shown in the charts below, overall satisfaction for two categories — live text chat and live video chat — was above 90%. Even more remarkable was that in both categories, the percentage saying “very satisfied” was at or very close to two-thirds.

“As a researcher,” he says, “it’s significant when you see more than half of respondents say something is ‘very good’ versus ‘okay’.”

By contrast, the use and satisfaction of chatbots, scored significantly lower than the two live-chat categories. However, a separate category called “virtual assistants” — such as Bank of America’s Erica and Capital One’s Eno — had much stronger results than the more basic chatbots. Both findings are covered in more detail in the related sections below.

Text-Based Live Chat: Top Performer

Live chat was one of the earliest technologies to blend digital technology with the personal touch. Articles about online chat first appeared on The Financial Brand in 2011, but that was for a few pioneers. The Phoenix Synergistics data indicates that today more than a third of consumers overall (36%) use live, text-based chat on a their mobile phone or desktop computer, that’s up from 26% in 2019.

In the Zone: More than half of the 18-49 age group, the “sweet spot for most financial institutions,” is a user of text-based chat.

On average consumers overall use text chat almost three times per month (2.9), with the highest use (3.7 times a month) among the 18-34 age group. Nearly three quarters of this age segment are “very satisfied” with their use of text chat.

The top reason given for using text-based chat (40%) was speed, says McCracken. Coming in a close second (38%) was: “It’s easier than filling out an online request, hopping in the car or making a phone call.”

Strikingly, 58% of consumers using text-based chat on a mobile phone or computer say it is better than interacting with staff at a branch.

That touches on another conclusion of the research: that consumers may perceive these remote channels as a more low-pressure sales approach. “A person may feel more in control of the situation when interacting by chat through a computer or a phone as opposed to sitting in front of someone at a branch,” McCracken observes. With the latter, it’s “harder to disengage,” he adds.

Top five activities performed with text-based live chat:

  1. Resolving account problems 28%
  2. Account maintenance (e.g. address change) 28%
  3. Request information about a service 23%
  4. Obtain balance or transaction information 23%
  5. Report fraudulent activity 22%

Live Video Chat: Big Pandemic Boost

McCracken uses a food analogy to describe what happened with digital channels generally during the pandemic, and video chat in particular. “When there’s nothing else in the house to eat, you’ll try some new food because you had to. If you end up liking it, you’ll most likely continue buying it.”

In its research, Phoenix Synergistics was probing was the use of video chat over mobile phones and computers, not use of video at drive-up stations or in-branch kiosks. The firm reports that use of live video chat jumped from 17% to 27% from 2019 to 2021, and 64% of these users were “very satisfied” with their most recent experience.

Three out of five consumers using video chat did so on a mobile phone. The much improved capabilities of both phone and networks have made this a much more satisfying experience. Just over half (52%) used video on a laptop or desktop computer, so there is some overlap.

The number one reason given for using video chat, McCracken says, is that it’s easier than using email or making a telephone call — exactly a third said that. The number two reason (31%) is that people “like to see who I’m speaking with.”

“That’s kind of the old-fashioned part of us,” says McCracken. “We still want to see our teller or bank rep.” The number three reason, at 30%, was “It’s a great way to get personal attention without going to the branch.”

Key Point: 69% of consumers using live video chat on a mobile phone or computer say it is better than interacting with staff at a branch.

McCracken notes that almost two-thirds of the people using video chat started using it during pandemic. “The idea of being able to interact with Sally or Joe without the fear of catching something must have been a huge driver,” he observes. Will the new interest continue now that branches are open and concern about Covid has lessened?

“Right now the majority are telling us that they will continue with their higher level of digital activity,” says McCracken. “But research a year from now will tell us what they actually did.”

Top activities performed with live video chat:

  1. Obtain balance or transaction information 25%
  2. Account maintenance (e.g. address change) 25%
  3. Authorize sending money to another person 24%
  4. Request transfer of funds between accounts 24%
  5. Consultation or financial advice 22%

Chatbots: Work in Progress

Exactly a third of consumer respondents had used a chatbot from a financial institution. The survey questionnaire did not use the word “chatbot,” but rather described it as “services that answer your questions using artificial intelligence that provides automated responses … [via] online chats, emails or computer-generated phone calls.” It also separately asked about “virtual assistants,” as described in the next section.

With chatbots, there was a sharp difference in use by age group.

Frequency of use of chatbots was similar to text-based chat, 2.8 times a month versus 2.9. The most frequent interaction (3.4 times a month) comes from the 35-49 age group.

Overall satisfaction with chatbots was the lowest of the four remote-service channels described in this article. But still, just over half of all users were “very satisfied,” which is not a bad number, according to McCracken.

Top reasons for dissatisfaction with automated chatbot service:

  1. My specific problem was not on the list presented 41%
  2. It was difficult to skip to speak to a representative 36%
  3. The service did not understand me (voice) 36%
  4. Did not provide the information I needed 35%
  5. My issue was too complicated to explain to the system 35%

Virtual Assistants: A Standout for Those That Have Them

One quarter of respondents say they have interacted with a virtual assistant from their financial institution. Not many banks or credit unions have this capability yet, although the technology is becoming more widely available and affordable. McCracken notes that the institutions that do have it, however, are among the largest. Bank of America’s Erica service alone is used by more than 17 million people.

According to the survey, the biggest users of virtual assistants are people between 18 and 49, at 37%. That compares with just 6% of consumers between 50 and 64 and 2% of those 65 or older. Typical frequency use for the main user group is 3.1 times per month.

Satisfaction with virtual assistants is 92% overall (“very” and “somewhat”). Of that number 62% are “very satisfied.” Those percentages are notably higher than those given for the more basic chatbot, showing the promise of the more advanced technology.

The greater trust people have in virtual assistants is shown in what they use them for, McCracken observes. He believes that the sales process becomes more viable with these advanced assistants.

Top activities performed with virtual assistant:

  1. Account maintenance (e.g. address change) 25%
  2. Request information about a service 24%
  3. Request transfer of funds between accounts 24%
  4. Report fraudulent activity 23%
  5. Obtain balance or transaction information 22%

This article was originally published on June 15, 2021. All content © 2021 by The Financial Brand and may not be reproduced by any means without permission.

 

This article was published in the Wall Street Journal.

Many women of color are turning to social media and their peers for investment know-how instead of hiring financial advisers.

Individual investors are increasingly seeking free financial advice on platforms including TikTok, Twitter and YouTube. For women of color, nearly half say they are likely to turn to social media for financial guidance compared with 18% of white women, according to a study released in April by investment-management firm Capital Group.

The reasons for turning to their peers range from wanting free advice to a desire to manage their own portfolios, rather than outsourcing it to an adviser.

Adri Saul, who is Latina, started investing in the stock market in April 2020 after she joined the HerMoney Facebook group. Ms. Saul, who is in her 30s, was attracted to the group that was founded by personal finance author Jean Chatzky to help women with their personal finances, partly because she said it was easy to get answers to money questions and it is a nonjudgmental place to learn about investing.

While she appreciates the quality of information she has seen in the group’s posts, she still does her own research. Ms. Saul now has about $5,000 invested in various stocks such as Twilio Inc. and DocuSign Inc. with an online broker.

“Some women may feel there’s a lack of cultural understanding by certain financial advisers and may not feel seen,” said Ramona Ortega, founder of My Money My Future Inc., a fintech firm which in part aims to teach Black women and Latinas about investing and building wealth.

A December survey from J.P. Morgan Wealth Management found—when starting to invest—78% of affluent Black women and Latinas used self-directed educational resources, including online educational resources, apps or TV shows, compared with 47% of affluent white women.

Donye Taylor started investing about two summers ago after a friend recommended she open a Roth IRA with an online broker. Investing in stocks and bonds was largely new to Ms. Taylor, a 26-year-old consultant and co-founder of a digital marketing company.

The California resident was raised by her aunt and uncle who encouraged her to save as much as possible but didn’t teach her about investing. Then about a year ago, another one of her friends suggested she also open an account on the brokerage platform Public.com, which she hadn’t heard of before.

“I naturally trust what another Black woman says,” said Ms. Taylor, referring to the friend who told her about Public.com. Ms. Taylor now has five figures invested in various stocks such as Tesla Inc. and Roku Inc. She is happy managing her own portfolio and doesn’t see the need to hire an adviser.

Like Ms. Taylor, many women of color want an active role in managing their money. Fifty-five percent of women of color like to be involved in the day-to-day management of their finances compared with 40% of white women, according to a study in 2020 by Cerulli Associates and Phoenix Marketing International.

If you are the first generation to have money to invest but aren’t familiar with the role of an adviser, you may be hesitant to sign on, said Ms. Ortega of My Money My Future.

Monée Williams has been approached by financial advisers in the past, but didn’t see a point in hiring one when she thought she could learn many of the basics of investing online free from her peers.

“It just doesn’t seem worth it,” said Ms. Williams, who self-manges roughly $120,000 in an online brokerage account.

Ms. Williams started to learn about investing when she joined the Facebook group The Stocks and Stilettos Society about a year ago. The 40-year-old marketer from Atlanta enjoyed the free content, liked that the group was founded by another Black woman and appreciated the chance to occasionally socialize online with some of the women she met in the group.

For example, she recently hosted a vision board party with some of the women whom she met in the group, where they each set and shared their goals, such as saving for a post-pandemic vacation.

Still, some women use caution when accepting tips from peers or online personal finance groups. That is a good thing, said Ms. Ortega.

“You’re likely not going to learn the fundamentals of personal finance and investing from someone else’s social media post,” she said. “But it can be a great place to start to get the basics.”

Digital-personal banking channels, including online chat and mobile personal bankers, have experienced significant growth in usage and potential as financial institutions (FIs) look for innovative alternatives to personalize customer experiences. These channels blend digital technology with a personal touch. While online chat can include both text-based and video options, text-based chat currently has a slight edge over video in terms of consumer preference. The mobile-personal-banker concept, which provides customers with an assigned personal banker they contact via their mobile phone, is also appealing to consumers. These are among the findings from a recent study, Transforming Channels for the New Digital Reality, by Phoenix Financial Services. A highlight of the study was an online survey conducted with 1,500 consumer financial decision-makers ages 18 and older.

More than one-third (36%) of consumers report they have used text-based chat on the website of one of their financial institutions. Average reported frequency among users is 2.9 times per month. Usage is stronger among Gen Z and Millennials than among Gen X and Baby Boomers. Importantly, there is widespread satisfaction among users, with 92% indicating they were satisfied with their most-recent experience and 66% saying they were “very satisfied.” Most of the text-based chat activity was performed either on a mobile phone or desktop PC, with few users mentioning usage via tablets. Users’ primary activities were problem resolution, account maintenance, and asking questions about accounts and services they were interested in. Potential for growth is strong, with four in ten (39%) nonusers indicating they would be likely to use text-based chat.

Close to three in ten (27%) consumers indicate they have used online video chat to interact with an FI. Like text-based chat, usage is stronger among Gen Z and Millennials when compared to older generations. Average frequency reported by users is 3.2 times per month. Satisfaction again is quite strong, with 93% indicating they were satisfied overall with their most-recent experience and 64% saying they were “very satisfied.” Most video-chat activity is performed via mobile phone or desktop PC, with few using tablets. The top banking activities performed with video chat are account maintenance and obtaining information. Future potential is notable, with one-third of nonusers reporting they would be likely to use online video chat.

Users and prospects for online text-based and video chat were asked about their overall preferences between the two methods. Four in ten (42%) prefer text-chat systems, one-fourth (26%) prefer online video chat, and close to three in ten (28%) find both methods equally acceptable.

Nearly three in ten (28%) consumers say they have used mobile personal bankers. Similar to online chat, usage is found to be stronger among Gen Z and Millennials when compared to older generational segments. Average monthly frequency reported by users is 3.3. The top activities include account maintenance and requesting information on new products and services. One-third (33%) of nonusers indicate they would be likely to use a mobile personal banker.

Comparisons with a previous Phoenix Financial Services survey show dramatic growth for each of these alternatives since 2019. Some of this increase is quite likely due to the impact of the COVID-19 pandemic. A significant number of users of each type of system report that they either began using the service or they increased their usage of these methods during the pandemic.

As FIs wrestle with digital-transformation programs, a great deal of discussion revolves around a “phygital” channel strategy that blends physical and digital channels. In the survey, consumers were asked about their ideal overall channel preference for financial activities. Results reveal that four in ten (40%) would prefer an all-digital process. (These are primarily younger consumers, ages 18 to 49.) One-third (33%) indicate a preference for an all-in-person process. (These are primarily consumers age 50 and older). Those preferring an all-in-person process were asked about the acceptability of a combination of in-person and digital contact. A slight majority (51%) would find a combination of in-person and digital contact acceptable, a finding that increases with age. Overall, seven in ten (71%) consumers would accept some degree of digital interaction with their FIs.

Bill McCracken of Phoenix Financial Services, stated, “Digital-personal channels are playing a major role as banks implement digital-transformation programs. These methods represent the best of both worlds. Consumer usage has grown and potential for further growth is strong. Gen Z and Millennial generations are most positive. Strong consumer satisfaction is a bonus. It is interesting that these channels are being used for new product information, which is important for account-acquisition programs. Consumers may perceive these channels as a more low-pressure sales approach, which they like. All in all, online chat and mobile personal bankers can be successful components of a phygital channel strategy.”

These are among the findings from a recent Phoenix Financial Services study, Transforming Channels for the New Digital Reality, which features 1,500 online interviews with consumer financial decision-makers ages 18 and older.

Phoenix Synergistics, a unit of Phoenix Financial Services, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

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This release was published by AiThority, AutomoBlog, AutoNewswire, Markets Insider, and Yahoo Finance.

NEW YORK, May 18, 2021 – With today’s heightened awareness of our impact on the environment and a more sustainable future, consumers’ interest in electric vehicles began to accelerate in 2020, which has coincided with a higher level of advertising activity. However, despite more brands flooding the market, none have managed to “crack the code” to become the dominant voice in EV advertising.

 

 

According to Phoenix Brand Effect, the gold standard for in-market measurement, we have yet to see any clear winners, as most brands struggle with being either memorable or well-branded in-market; at best, some were average on both. In digging into the creative diagnostics of those ads, we found the ads lack relevance and do not address why consumers need to jump onto this EV bandwagon. EV ads are often future-looking and thus it may not seem as relevant to consumers at present.

We have identified some key advertising learnings that can help EV brands break through this increasingly crowded marketplace:

  • In addition to being forward-looking, be sure to ground your advertising in relatable situations and identify the present-day reasons why your consumers should choose your EV. A great way to achieve this is by applying System 1 tools (including Emotivation) to uncover emotional drivers that may help drive greater relevance.
  • Though an ad may be strong creatively, it still requires strong media support to break through. Of the current brands in the market, the only two to perform near average were supported by ads in the Super Bowl. High-value, special programming (such as the Super Bowl or the Olympics) can be an excellent value add to support advertising launches and support in-market breakthrough.

Phoenix MI has been closely tracking and analyzing trends in the Electric Vehicle (EV) market since 2018 and anticipate EV’s (and likewise, their advertising) to increase their prevalence in the Automotive market in the coming years, and have been tailoring our research to cater to this new, emerging market.

If you are interested in learning more about Phoenix’s Electric Vehicle Market Report or how the experts at Phoenix develop creative solutions for the fast-moving automotive industry, drop us a line!