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Deposit Accounts - US - July 2010

This report builds on the analysis presented in Mintel's report Retail Banking—U.S., September 2008 and Retail Banking—U.S., December 2009, as well as previous Mintel reports on this subject. Insights include:

  • The U.S. deposit business is large and growing. The fragile economy of the past several years has instilled in consumers a “New Frugal” attitude of saving more and spending less, boosting bank deposits.
  • Banks have also been working hard to attract new deposits since the economic events of 2008 and 2009, as they have been rebuilding their balance sheets and have needed to gather assets to meet regulatory capital requirements. The competition for deposits has been fierce between the nearly 16,000 banks, thrifts and credit unions.
  • At the same time, weakened demand and more critical underwriting requirements have reduced lending at banks, further swelling deposits. With interest rates at historically low levels, banks are paying relatively negligible amounts in interest to depositors, boosting net interest income to record levels.
  • While the deposit business is growing in size, it may not be growing in profitability. New federal regulatory rules likely to take effect in the summer of 2010 will force many banks to reduce their penalty fees on account overdrafts, previously a significant contributor to revenues. And the proposed federal financial reform legislation will likely place further constraints on fee income overall.
  • Banks are looking for new ways to increase revenues to make up for lost fees and attract new customers and hang onto old ones. But consumers are averse to paying annual fees for rewards programs as well as for things that have been offered for free in the past, such as online banking and bill payment.
  • Many consumers currently have a negative attitude about banks and the banking system, which creates an opportunity for small, local banks and credit unions to attract new customers.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Data sources
        • Consumer survey data
          • Abbreviations and terms
            • Companies mentioned in this report
            • Executive Summary

              • The U.S. deposit accounts market
                • Current market conditions and outlook
                  • Advertising and promotion
                    • The consumer
                    • Insights and Opportunities

                      • Key points
                        • Credit unions can take advantage of distrust, dissatisfaction with banks
                          • Are merchants the “new interchange” to fund bank rewards programs?
                            • Unbanked and underbanked are a big, ignored market niche
                            • Inspire Insights

                                • Going to the smaller banks
                                  • Implication
                                    • Like It’s a Wonderful Life
                                      • Implication
                                      • Market Size and Forecast

                                        • Key points
                                          • Market size: $10 trillion
                                              • Figure 1: Growth in deposits for banks and thrifts and credit unions, 2006-09
                                              • Figure 2: Share of deposits for banks and thrifts and credit unions, 2006-09
                                          • Competitive Context

                                            • Key points
                                              • The U.S. deposit business is big, broad and diverse
                                                  • Figure 3: Ranking of top U.S. banks, by deposits, year-end 2008 and 2009
                                                  • Figure 4: Ranking of top 10 U.S. banks, by deposits, 2005-09
                                                • Deposits at credit unions
                                                    • Figure 5: Credit union rankings, by total deposits and market share, year-end 2008 and 2009
                                                • Segment Performance

                                                  • Key points
                                                    • Bank profits turn corner in Q1 2010
                                                      • Net income and revenues at top U.S. banks
                                                        • Figure 6: Ranking of top 10 banks by net income and revenue, Q1 2009 and Q1 2010
                                                        • Figure 7: Net income for top 10 banks ranked by total deposits, 2005-09
                                                      • Wide lending margins
                                                        • Weaker fee revenue likely
                                                          • Figure 8: Bank overdraft revenue, 2000-10
                                                        • Senate amendment would permit regulation of debit card interchange
                                                          • What will banks do now?
                                                          • Market Drivers

                                                            • Key points
                                                              • Economic factors, consumer attitudes bode well for increased savings
                                                                  • Figure 9: Total U.S. residential mortgage debt, 2003-09
                                                                  • Figure 10: U.S. consumer credit outstanding, 2005-10
                                                                • The new frugality
                                                                  • We’re not out of the woods yet
                                                                    • Financial regulation reform may also help drive increased deposits
                                                                    • Leading Companies

                                                                      • Key points
                                                                        • Bank of America
                                                                          • JPMorgan Chase
                                                                            • Citigroup
                                                                              • Wells Fargo
                                                                                • PNC Financial Services
                                                                                  • U.S. Bank
                                                                                    • SunTrust
                                                                                      • Capital One
                                                                                        • BB&T
                                                                                          • TD Bank
                                                                                            • USAA
                                                                                              • Navy Federal Credit Union
                                                                                                • HSBC
                                                                                                  • ING Direct
                                                                                                    • American Express
                                                                                                    • Innovation and Innovators

                                                                                                      • Key points
                                                                                                        • SmartyPig
                                                                                                          • KeyBank
                                                                                                            • USAA Federal Savings Bank
                                                                                                              • J.P. Morgan Chase & Co
                                                                                                                • QwikDeposit To Go
                                                                                                                  • ClickandBuy
                                                                                                                  • Advertising and Promotion

                                                                                                                    • Key points
                                                                                                                      • Overview
                                                                                                                        • Changes in overdraft policies
                                                                                                                          • Figure 11: KeyBank direct mail ad, June 2009
                                                                                                                          • Figure 12: M&T Bank direct mail ad, January 2010
                                                                                                                          • Figure 13: HSBC print ad, July 2009
                                                                                                                          • Figure 14: Independence Bank direct mail ad, June 2009
                                                                                                                          • Figure 15: American Express direct mail ad, April 2010
                                                                                                                          • Figure 16: US Bank direct mail ad, February 2010
                                                                                                                          • Figure 17: Citibank, AT&T Universal direct mail ad, March 2010
                                                                                                                          • Figure 18: USAA email ad, March 2010
                                                                                                                          • Figure 19: Chase overdraft direct mail ad, February 2010
                                                                                                                          • Figure 20: Citizens Financial Group direct mail ad, March 2010
                                                                                                                      • The Consumer

                                                                                                                        • Key points
                                                                                                                          • Where people bank: About half prefer large national banks
                                                                                                                              • Figure 21: Type of institution for primary checking account, by gender, April 2010
                                                                                                                              • Figure 22: Type of institution for primary checking account, by age, April 2010
                                                                                                                              • Figure 23: Type of institution for primary checking account, by income, April 2010
                                                                                                                              • Figure 24: Type of institution for primary checking account, by household income, April 2010
                                                                                                                              • Figure 25: Type of institution for primary checking account, by race/ethnicity, April 2010
                                                                                                                              • Figure 26: Type of institution for primary checking account, by education, April 2010
                                                                                                                              • Figure 27: Type of institution for primary checking account, by region, April 2010
                                                                                                                              • Figure 28: Type of institution for primary checking account, by type of area, April 2010
                                                                                                                              • Figure 29: Type of institution for primary checking account, by gender and presence of children, April 2010
                                                                                                                              • Figure 30: Type of institution for primary checking account, by gender and income, April 2010
                                                                                                                            • Customers of large banks are the least satisfied with their own banks
                                                                                                                              • Credit union customers most likely to opt in to overdraft protection
                                                                                                                                • Credit unions do well at offering multiple financial products
                                                                                                                                  • Big national banks are better at offering product rewards
                                                                                                                                      • Figure 31: Likelihood to switch banks, by institution type, April 2010
                                                                                                                                      • Figure 32: Likelihood of opt in for overdraft protection, by institution type, April 2010
                                                                                                                                      • Figure 33: Other products at primary bank, April 2010
                                                                                                                                      • Figure 34: Products offering rewards programs at primary bank, April 2010
                                                                                                                                    • Overdraft protection: More plan to opt in than opt out, but less than 25% plan to sign up
                                                                                                                                        • Figure 35: Likelihood of opting in to overdraft protection, by gender, April 2010
                                                                                                                                        • Figure 36: Likelihood of opting in to overdraft protection, by age, April 2010
                                                                                                                                        • Figure 37: Likelihood of opting in to overdraft protection, by income, April 2010
                                                                                                                                        • Figure 38: Likelihood of opting in to overdraft protection, by race/ethnicity, April 2010
                                                                                                                                        • Figure 39: Likelihood of opting in to overdraft protection, by education, April 2010
                                                                                                                                        • Figure 40: Likelihood of opting in to overdraft protection, by marital status and presence of children, April 2010
                                                                                                                                      • Bank satisfaction, fees, and the likelihood of switching
                                                                                                                                          • Figure 41: Satisfaction with primary financial institution and likelihood of switching, by gender, April 2010
                                                                                                                                          • Figure 42: Satisfaction with primary financial institution and likelihood of switching, by age, April 2010
                                                                                                                                          • Figure 43: Satisfaction with primary financial institution and likelihood of switching, by household income, April 2010
                                                                                                                                          • Figure 44: Satisfaction with primary financial institution and likelihood of switching, by race/ethnicity, April 2010
                                                                                                                                          • Figure 45: Satisfaction with primary financial institution and likelihood of switching, by education, April 2010
                                                                                                                                          • Figure 46: Satisfaction with primary financial institution and likelihood of switching, by geographic area, April 2010
                                                                                                                                          • Figure 47: Satisfaction with primary financial institution and likelihood of switching, by gender and presence of children, April 2010
                                                                                                                                          • Figure 48: Satisfaction with primary financial institution and likelihood of switching, by marital status and presence of children, April 2010
                                                                                                                                          • Figure 49: Satisfaction with primary financial institution and likelihood of switching, by gender and income, April 2010
                                                                                                                                        • Other products consumers hold at their primary checking bank
                                                                                                                                            • Figure 50: Other financial products held at primary institution, by gender, April 2010
                                                                                                                                            • Figure 51: Other financial products held at primary institution, by age, April 2010
                                                                                                                                            • Figure 52: Other financial products held at primary institution, by household income, April 2010
                                                                                                                                            • Figure 53: Other financial products held at primary institution, by race/ethnicity, April 2010
                                                                                                                                            • Figure 54: Other financial products held at primary institution, by education, April 2010
                                                                                                                                            • Figure 55: Other financial products held at primary institution, by region, April 2010
                                                                                                                                            • Figure 56: Other financial products held at primary institution, by gender and presence of children, April 2010
                                                                                                                                            • Figure 57: Other financial products held at primary institution, by gender and income, April 2010
                                                                                                                                          • Rewards programs for bank products
                                                                                                                                              • Figure 58: Incidence of rewards offerings for products at primary institution, by gender, April 2010
                                                                                                                                              • Figure 59: Incidence of rewards offerings for products at primary institution, by age, April 2010
                                                                                                                                              • Figure 60: Incidence of rewards offerings for products at primary institution, by income, April 2010
                                                                                                                                              • Figure 61: Incidence of rewards for financial products at primary institution, by education, April 2010
                                                                                                                                              • Figure 62: Incidence of rewards for financial products at primary institution, by gender and presence of children, April 2010
                                                                                                                                            • Cash is king: consumers prefer cash rewards over airline miles, but few are willing to pay for either
                                                                                                                                                • Figure 63: Amount of annual fee respondent will pay for checking account rewards, by gender, April 2010
                                                                                                                                                • Figure 64: Amount of annual fee respondent will pay for checking account rewards, by age, April 2010
                                                                                                                                                • Figure 65: Amount of annual fee respondent will pay for checking account rewards, by household income, April 2010
                                                                                                                                                • Figure 66: Amount of annual fee respondent will pay for checking account rewards, by education, April 2010
                                                                                                                                                • Figure 67: Amount of annual fee respondent will pay for checking account rewards, by area, April 2010
                                                                                                                                                • Figure 68: Amount of annual fee respondent will pay for checking account rewards, by gender and income, April 2010
                                                                                                                                                • Figure 69: Amount of annual fee respondent will pay for checking account rewards, by institution type, April 2010
                                                                                                                                            • Key Driver Analysis

                                                                                                                                                • Key drivers
                                                                                                                                                  • Discussion
                                                                                                                                                    • Market landscape
                                                                                                                                                      • Figure 70: Key drivers, by institution type, April 2010
                                                                                                                                                    • Key driver methodology
                                                                                                                                                      • Figure 71: Key driver analysis, bivariate correlations, April 2010
                                                                                                                                                  • Cluster Analysis

                                                                                                                                                      • Cluster 1: Rewarded Activists
                                                                                                                                                        • Characteristics:
                                                                                                                                                          • Demographics:
                                                                                                                                                            • Cluster 2: Mid-payers
                                                                                                                                                              • Characteristics:
                                                                                                                                                                • Demographics:
                                                                                                                                                                  • Cluster 3: Unrewarded
                                                                                                                                                                    • Characteristics:
                                                                                                                                                                      • Demographics:
                                                                                                                                                                        • Characteristic tables:
                                                                                                                                                                          • Figure 72: Checking account clusters, April 2010
                                                                                                                                                                          • Figure 73: Type of institution for primary checking account, by checking account clusters, April 2010
                                                                                                                                                                          • Figure 74: Attitudes about primary bank and annual fees, by checking account clusters, April 2010
                                                                                                                                                                          • Figure 75: Other products at primary bank, by checking account clusters, April 2010
                                                                                                                                                                          • Figure 76: Type of products offering rewards programs at primary bank, by checking account clusters, April 2010
                                                                                                                                                                          • Figure 77: Preferred rewards programs, by checking account clusters, April 2010
                                                                                                                                                                        • Demographic tables:
                                                                                                                                                                          • Figure 78: Checking account clusters, by gender, April 2010
                                                                                                                                                                          • Figure 79: Checking account clusters, by age, April 2010
                                                                                                                                                                          • Figure 80: Checking account clusters, by household income, April 2010
                                                                                                                                                                          • Figure 81: Checking account clusters, by race/ethnicity, April 2010
                                                                                                                                                                          • Figure 82: Checking account clusters, by employment, April 2010
                                                                                                                                                                        • Cluster methodology:
                                                                                                                                                                        • Appendix: Trade Associations

                                                                                                                                                                          Companies Covered

                                                                                                                                                                          • Amalgamated Bank
                                                                                                                                                                          • American Express Company (The)
                                                                                                                                                                          • Bank of America Corporation
                                                                                                                                                                          • Bank One Corporation
                                                                                                                                                                          • BB&T Corporation
                                                                                                                                                                          • Bear Stearns
                                                                                                                                                                          • BlackRock, Inc.
                                                                                                                                                                          • Capital One Financial Corporation
                                                                                                                                                                          • Citibank
                                                                                                                                                                          • CitiFinancial
                                                                                                                                                                          • Citigroup Inc.
                                                                                                                                                                          • Citizens Financial Group, Inc.
                                                                                                                                                                          • Community State Bank
                                                                                                                                                                          • Consumer Bankers Association
                                                                                                                                                                          • Countrywide Financial Corporation
                                                                                                                                                                          • Credit Union National Association
                                                                                                                                                                          • Discover Financial Services Inc.
                                                                                                                                                                          • Facebook, Inc.
                                                                                                                                                                          • Federal Deposit Insurance Corporation
                                                                                                                                                                          • Federal Reserve System
                                                                                                                                                                          • Fifth Third Bancorp
                                                                                                                                                                          • First Franklin Financial Corporation
                                                                                                                                                                          • Garmin International Inc.
                                                                                                                                                                          • General Motors Corporation
                                                                                                                                                                          • Golden West Financial Corporation
                                                                                                                                                                          • Goldman Sachs Group, Inc., The
                                                                                                                                                                          • Greenfield Online
                                                                                                                                                                          • HSBC USA Inc.
                                                                                                                                                                          • ING Bank, fsb
                                                                                                                                                                          • JPMorgan Chase & Co
                                                                                                                                                                          • KeyBank Real Estate Capital
                                                                                                                                                                          • MBNA Corporation
                                                                                                                                                                          • Merrill Lynch & Co. Inc
                                                                                                                                                                          • Mortgage Bankers Association (MBA)
                                                                                                                                                                          • NatCity Investments Inc.
                                                                                                                                                                          • National Credit Union Administration
                                                                                                                                                                          • Nationwide Mutual Insurance Company
                                                                                                                                                                          • Navy Federal Credit Union
                                                                                                                                                                          • Northern Trust Corporation
                                                                                                                                                                          • PayPal Inc.
                                                                                                                                                                          • Regions Financial Corporation
                                                                                                                                                                          • ShareBuilder Corp.
                                                                                                                                                                          • SunTrust Banks Inc.
                                                                                                                                                                          • TD Ameritrade Holding Corporation
                                                                                                                                                                          • The American Bankers Association
                                                                                                                                                                          • The American Financial Services Association
                                                                                                                                                                          • The New York Times Company
                                                                                                                                                                          • The PNC Financial Services Group
                                                                                                                                                                          • Tupperware
                                                                                                                                                                          • U.S. Bureau of Labor Statistics
                                                                                                                                                                          • USAA
                                                                                                                                                                          • Visa U.S.A. Inc.
                                                                                                                                                                          • Wachovia Corporation
                                                                                                                                                                          • Washington Mutual Inc
                                                                                                                                                                          • Wells Fargo & Company

                                                                                                                                                                          Deposit Accounts - US - July 2010

                                                                                                                                                                          £3,199.84 (Excl.Tax)