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Retail Banking and Credit Unions - US - February 2016

Commercial banks and savings institutions hold more than $10 trillion in domestic deposits for customers in need of a primary banking provider. The movement of the retail banking industry toward a more mobile experience provides financial institutions with a tremendous opportunity to establish new relationships and deepen engagement with current customers.

Readers of this report will learn how consumers use retail banks and credit unions and the major factors that influence their decisions to choose a provider. New opportunities and marketing strategies are covered with a focus on consumer attitudes and potential for new demand. Financial needs based on demographics are explored in detail to show how marketers might best position services to specific segments of the market.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Large banks dominate and deposits at commercial banks are growing
            • Figure 1: Domestic deposits of FDIC-insured commercial banks and savings institutions, 2007-14
          • Mobile banking is growing
            • Figure 2: How banking transactions are conducted, all, December 2013 versus August 2015
          • Lack of trust over security concerns stains landscape
            • Figure 3: Banking attitudes and behaviors, all, December 2015
          • The opportunities
            • Opportunities available to increase mobile banking adoption via security emphasis
              • Figure 4: Mobile banking usage, all, December 2015
            • Opportunity to meet the needs of many unsatisfied mobile banking consumers
              • Figure 5: Mobile banking preferences, all, December 2015
            • Financial institutions can encourage interaction in every channel based on service
              • Figure 6: How banking transactions are conducted, all, December 2015
            • What it means
            • The Market – What You Need to Know

              • Deposits at commercial banks over $10 trillion
                • US personal savings rate slowly increases
                  • The economy remains strong
                    • Fed interest rate hike and savings rates
                      • Smartphone and tablet sales rise
                      • Market Size and Forecast

                        • Number of banks and credit unions continues to fall
                          • Figure 7: Number of FDIC-Insured banks and credit unions, 1996-2014
                        • Assets at commercial banks climb
                          • Figure 8: Assets of FDIC-insured commercial banks and savings institutions, 2007-14
                        • Deposits at commercial banks strong
                          • Figure 9: Domestic deposits of FDIC-insured commercial banks and savings institutions, 2007-14
                        • Asset growth at credit unions tops 30%
                          • Figure 10: Total assets at US credit unions, 2009-15
                      • Market Factors

                        • US personal savings rate slowly increases
                          • Figure 11: Personal savings rate, 2008-15
                        • The economy remains strong
                          • Figure 12: Percentage change from preceding period in GDP (Q1 2013-Q3 2015)
                        • Fed interest rate hike and savings rates
                          • Figure 13: Effective federal funds rate, 1990-2015
                        • Smartphone and tablet sales rise
                          • Figure 14: Total US unit smartphone sales, 2009-19
                          • Figure 15: Total US sales of tablets, at current prices, 2010-15
                      • Key Players – What You Need to Know

                        • Mobile banking is growing
                          • Need to address security concerns
                            • First hike interest rate in nine years alters banking landscape
                            • What’s Working?

                              • Mobile banking is growing
                                • Figure 16: How banking transactions are conducted, all, December 2013 versus August 2015
                            • What’s Struggling?

                              • Security concerns have many nervous
                                • Figure 17: Banking attitudes and behaviors, all, December 2015
                                • Figure 18: BMO Harris Bank email, 2015
                                • Figure 19: Chase mobile ad, 2015
                                • Figure 20: Bank of America email, 2015
                            • What’s Next?

                              • First interest rate hike in nine years alters banking landscape
                                • Figure 21: Synchrony Bank print ad, 2016
                                • Figure 22: Capital One email ad, 2016
                                • Figure 23: Effective federal funds rate, 1990-2015
                              • Wells Fargo testing voice recognition and biometrics
                              • The Consumer – What You Need to Know

                                • Large banks dominate
                                  • Free checking and convenience essential features for consumers
                                    • Mobile banking essential for Millennials and Hispanics
                                      • Four of 10 yet to adopt mobile banking
                                        • Opportunity for more satisfying mobile experience
                                          • Lack of trust and security concerns present barrier for many
                                            • Banking interactions determined by type of transaction
                                              • Consumers concerned about security
                                              • Account Ownership

                                                • Checking account ownership universal
                                                  • Figure 24: Account ownership, all, December 2015
                                                • Men more likely to own investment accounts
                                                  • Figure 25: Account ownership, by gender, December 2015
                                                • Variety of accounts used increases with wealth
                                                  • Figure 26: Account ownership, by household income, December 2015
                                                • Black consumers underserved in investment, mortgage accounts
                                                  • Figure 27: Account ownership, race/Hispanic origin, December 2015
                                              • Location of Primary Account

                                                • Large banks dominate
                                                  • Figure 28: Location of primary account, all, December 2015
                                                • Credit union client base skews younger
                                                  • Figure 29: Location of primary account, credit union ownership, by age group, December 2015
                                                • Millennials using large banks for investment accounts
                                                  • Figure 30: Location of investment account, by generation, December 2015
                                                • More affluent consumers using internet-only banks
                                                  • Figure 31: Location of any account, by household income, December 2015
                                                • Parents using online and alternative banks
                                                  • Figure 32: Location of any account, by presence of children, December 2015
                                                • Hispanics twice as likely to use alternative bank
                                                  • Figure 33: Location of any account, by race/Hispanic origin, December 2015
                                              • Essential Banking Features

                                                • Free checking and convenience essential feature for consumers
                                                  • Figure 34: Essential banking features, all, December 2015
                                                • Mobile banking essential for Millennials
                                                  • Figure 35: Essential banking features, by generation, December 2015
                                                • Online banking most popular among more affluent
                                                  • Figure 36: Essential banking features, by household income, December 2015
                                                • Hispanics most likely to use mobile banking
                                                  • Figure 37: Essential banking features, by race/Hispanic origin, December 2015
                                              • Mobile Banking Usage

                                                • Four of 10 yet to adopt mobile banking
                                                  • Figure 38: Mobile banking usage, all, December 2015
                                                • Large national bank customers lead in mobile banking usage
                                                  • Figure 39: Mobile banking usage, by primary account location, December 2015
                                                • Millennials using mobile banking apps
                                                  • Figure 40: Mobile banking usage, all, December 2015
                                                • Parents nearly twice as likely to use mobile banking
                                                  • Figure 41: Mobile banking usage, by presence of children, December 2015
                                                • Three-quarters of Hispanics banking mobile
                                                  • Figure 42: Mobile banking usage, by race/Hispanic origin, December 2015
                                              • Mobile Banking Preferences

                                                • More are banking mobile, still room for improvement
                                                  • Figure 43: Mobile banking preferences, all, December 2015
                                                • Young women frequent mobile banking users
                                                  • Figure 44: Mobile banking preferences, by gender and age, December 2015
                                                • Parents prefer phone/tablet to computer
                                                  • Figure 45: Mobile banking preferences, by presence of children, December 2015
                                                • Hispanics opening accounts on mobile devices
                                                  • Figure 46: Mobile banking preferences, all, December 2015
                                              • Reasons for Not Using Mobile Devices

                                                • Lack of trust and security concerns present barrier for many
                                                  • Figure 47: Reasons for not using mobile devices, all, December 2015
                                                • Younger customers more trusting of digital security
                                                  • Figure 48: Reasons for not using mobile devices, all, December 2015
                                                • Security of greater concern among more affluent
                                                  • Figure 49: Reasons for not using mobile devices, all, December 2015
                                                • Hispanics agree mobile banking valuable, but seek repeated use
                                                  • Figure 50: Reasons for not using mobile devices, by race/Hispanic origin, December 2015
                                              • How Banking Transactions Are Conducted

                                                • Banking interactions determined by type of transaction
                                                    • Figure 51: How banking transactions are conducted, all, December 2015
                                                  • Checking account balances most likely action on mobile device
                                                    • Figure 52: How banking transactions are conducted, all, December 2015
                                                  • Small community banks succeed with newer mobile transactions
                                                    • Figure 53: How banking transactions are conducted, Any mobile devices, December 2015
                                                  • Hispanics far more likely to transfer money via mobile device
                                                    • Figure 54: How banking transactions are conducted, any mobile devices, December 2015
                                                • Banking Attitudes and Behaviors

                                                  • Room for improvement on trust and service
                                                    • Figure 55: Banking attitudes and behaviors, all, December 2015
                                                  • Credit Union customers trust their institution
                                                    • Figure 56: Banking attitudes and behaviors, credit unions versus all, December 2015
                                                  • Young men least trusting of financial institutions
                                                    • Figure 57: Banking attitudes and behaviors, all, December 2015
                                                  • Opportunity for financial advisory services for $75K-99K group
                                                    • Figure 58: Banking attitudes and behaviors, by household income, December 2015
                                                  • Small banks and credit unions compete on service
                                                    • Figure 59: Banking attitudes and behaviors, by household income, December 2015
                                                  • Hispanics looking to consolidate accounts
                                                    • Figure 60: Banking attitudes and behaviors, by race/Hispanic origin, December 2015
                                                • Appendix – Data Sources and Abbreviations

                                                  • Data sources
                                                    • Consumer survey data
                                                      • Direct marketing creative
                                                        • Abbreviations and terms
                                                          • Abbreviations

                                                          Companies Covered

                                                          To learn more about the companies covered in this report please contact us.

                                                          Retail Banking and Credit Unions - US - February 2016

                                                          £3,199.84 (Excl.Tax)