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US Black Consumers and the Banking Experience Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Black Consumers and the Banking Experience market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key points included

  • Basic account ownership is high, but few have investment or loan accounts
  • Black banking segments reflect expectations and financial goals
  • Lower loan account ownership attributed to more credit denials

Covered in this report

This report analyzes black consumers’ attitudes and perceptions regarding their experience in managing financial accounts at banks, credit unions, savings and loan associations and alternative institutions including currency exchanges and check-cashing locations.

Expert analysis from a specialist in the field

Written by Toya Mitchell, a leading analyst in the Multicultural sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The majority of Black consumers have at least one bank account, but the share is slightly lower than the general market. Black consumers are satisfied with their bank, which is rooted in the anytime, anywhere customer service they receive plus tools to help them manage their money. Toya Mitchell
Multicultural Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The insights
            • Basic account ownership is high, but few have investment or loan accounts
              • Figure 1: Financial product ownership, total and Black, November 2018
            • Black banking segments reflect expectations and financial goals
              • Figure 2: Black consumer banking segments, November 2018
            • Lower loan account ownership attributed to more credit denials
              • Figure 3: Credit experiences among US families, by race and Hispanic origin, 2016
            • National banks are #1, but low- and no-fee banks hold value
              • Figure 4: Banking locations, total vs Black, November, 2018
            • ATMs’ easy, convenient and trusted performance is preferred over other platforms
              • Figure 5: Banking transaction portal perceptions, November 2018
            • Most are satisfied with their bank, but poor treatment can prompt loyal customers to leave
              • Figure 6: Attitudes toward banking and bank switching triggers, November 2018
            • What it means
            • The Market – What You Need to Know

              • Half of Black population is under 35 years of age
                • Preference for credit unions rooted in membership within community organizations
                  • Black consumers do not apply for credit for fear of denial
                  • The Black Population by the Numbers

                    • There are 44 million Black people in the US
                      • Figure 7: US population, Black and non-Black, 2013-23
                    • Black population skews young
                      • Figure 8: Share of US population by age group, total and Black, 2018
                    • Black adults are less likely to be married
                      • Figure 9: US households by detailed type, by race and Hispanic origin, 2018
                  • Market Factors

                    • Median net worth of Black households is one fifth the average
                      • Figure 10: Median household net worth, by race/Hispanic origin of respondent, 2016
                      • Figure 11: Change in median net worth, by race and Hispanic origin, 2007-16
                    • One third of households are low-income; middle-income households on par with the average
                      • Figure 12: Household income distribution, by race and Hispanic origin, 2017
                    • Black college attendance on par, but graduation rates are lower
                      • Figure 13: Educational attainment, by race and Hispanic origin, 2017
                    • Lower household income and wealth drive revolving and student debt
                      • Figure 14: Debt obligations among US households, by race and Hispanic origin, 2016
                    • Financial condition negatively impacts credit score
                      • Figure 15: Self-reported credit score, total and Black, November 2018
                    • Income, asset ownership, debt load impact credit worthiness
                      • Figure 16: Credit experiences among US families, by race and Hispanic origin, 2016
                  • Market Perspective

                    • Credit unions’ focus on service resonates with Black consumers
                      • Figure 17: Banks used in the last 12 months, primary institution, total and Black, July 2017-August 2018
                    • Low bank account dollar values impact services offered
                      • Figure 18: Household holdings of selected financial assets – Average value in inflation-adjusted dollars, by race and Hispanic origin, 2016
                    • Black households own fewer assets due in part to lack of financing
                      • Figure 19: Asset ownership among US households, by race and Hispanic origin, 2016
                    • Low home values impact personal wealth
                      • Figure 20: Mean net housing wealth, by race and Hispanic origin, 2016
                  • Key Trends – What You Need to Know

                    • #BankBlack movement drives new customer base at online-only bank
                      • Black customers pay higher service fees at community banks
                        • Repealed legislation may negatively impact Black mortgage applicants
                        • What’s Working?

                          • Online-based OneUnited biggest benefactor of #BankBlack movement
                            • Figure 21: OneUnited Facebook advertising, 2017-18
                        • What’s Struggling?

                          • Stringent consumer criteria stress Black bank consumers
                            • Redlining continues to deny Black consumers mortgage lending
                              • Black-owned banks continue to struggle post-recession
                                • Figure 22: Number of minority-owned and serving banks, by race, Hispanic origin and gender, 2003-18
                            • What’s Next?

                              • Operation Hope looks to increase financial literacy, wealth among underserved communities
                                • Partial repeal of Dodd-Frank may negatively impact Black bank customers
                                • The Consumer – What You Need to Know

                                  • Service and tools drive Black banking segments
                                    • Most Black consumers have checking and savings accounts, but less than the general market
                                      • Nearly half of Black consumers bank at national banks; online-only banks gain traction
                                        • Nearly three quarters use debit cards
                                          • ATMs are easy and convenient because they are familiar and safe
                                            • Being treated as a product rather than customer can drive customers away
                                              • Banking is personal for most Black consumers
                                              • Black Consumer Banking Segments

                                                • Some Black consumers use banks out of necessity, others to reach goals
                                                  • Figure 23: Black consumer banking segments, November 2018
                                                • Modern Customers moderately comfortable with their bank
                                                    • Figure 24: Profile of Modern Customers segment, November 2018
                                                  • Investment Customers view their bank as their financial services partner
                                                      • Figure 25: Profile of Investment Customers segment, November 2018
                                                    • Traditional Customers happy with banker’s service, but remain disengaged
                                                        • Figure 26: Profile of Traditional Customers segment, November 2018
                                                      • Indifferent Customers use banks out of need, and can’t see value beyond the basics
                                                          • Figure 27: Profile of Indifferent Customers segment, November 2018
                                                      • Financial Product Ownership

                                                        • Financial product ownership limited to everyday transactions
                                                          • Figure 28: Financial product ownership, total and Black, November 2018
                                                        • Established Black consumers more likely to have financial products
                                                          • Figure 29: Financial product ownership – Asset accounts, by generation, November 2018
                                                          • Figure 30: Financial product ownership – Debt accounts, by generation, November 2018
                                                        • Good credit consumers focus on day-to-day transactions
                                                          • Figure 31: Financial product ownership – Part I, by self-reported credit score, November 2018
                                                          • Figure 32: Financial product ownership – Part II, by self-reported credit score, November 2018
                                                        • Retirees support themselves on liquid assets and planned investments
                                                          • Figure 33: Financial product ownership – Asset accounts, by employment status, November 2018
                                                        • Middle-income consumers do not have retirement savings
                                                          • Figure 34: Financial product ownership – Asset accounts, by household income, November 2018
                                                      • Banking Locations

                                                        • Most choose big-name banks, but smaller banks hold near equal importance
                                                          • Figure 35: Banking locations, total vs Black, November 2018
                                                        • Older Millennials’ preference for multiple products and banking online tied to institution type
                                                          • Figure 36: Banking locations, by generation, November 2018
                                                        • More income drives choice and access to traditional banks
                                                          • Figure 37: Banking locations, by household income, November 2018
                                                        • Women seek convenience and personal service to help with their everyday banking
                                                          • Figure 38: Banking locations, by gender and age group, November 2018
                                                      • Banking Activities

                                                        • Cards drive everyday transactions
                                                          • Figure 39: Banking activities, total vs Black, November 2018
                                                        • Busy middle-aged consumers bank when it is convenient
                                                          • Figure 40: Banking activities, by age group, November 2018
                                                        • Moms handle everyday transactions; dads manage big-ticket or longer-term issues
                                                          • Figure 41: Banking activities, by gender and parenthood, November 2018
                                                      • Banking Behavior and Perceptions

                                                        • ATM still rules in conducting basic banking transactions
                                                          • Figure 42: Banking behavior, total vs Black, November 2018
                                                        • Older consumers prefer familiar means of conducting financial transactions
                                                          • Figure 43: Banking behavior, by age group, November 2018
                                                        • Consumers who prefer advanced technology conduct the most banking activities
                                                          • Figure 44: Banking behavior, by banking activities, November 2018
                                                        • Convenience and easy use trump safety and trust
                                                          • Figure 45: Banking transaction portal perceptions, November 2018
                                                      • Bank Switching Triggers

                                                        • Negative experiences drive customers away vs rewards that pull them in
                                                          • Figure 46: Bank switching triggers, total vs Black, November 2018
                                                        • Long-time customers may feel disrespected, but still won’t switch banks
                                                          • Figure 47: Bank switching triggers, by age group, November 2018
                                                        • A tight budget plus higher fees = lowered value
                                                          • Figure 48: Bank switching triggers, by household income, November 2018
                                                      • Attitudes toward Banking

                                                        • Black consumers mostly enjoy a personal relationship with their bank
                                                          • Figure 49: Attitudes toward banking, November 2018
                                                        • Superior customer service includes tools and personal touch
                                                          • Figure 50: Attitudes toward banking, total vs Black, November 2018
                                                        • Bank perception rooted in level of service and tools
                                                          • Figure 51: Attitudes toward banking, by Black consumer banking segments, November 2018
                                                      • Appendix – Data Sources and Abbreviations

                                                        • Data sources
                                                          • Consumer survey data
                                                            • Abbreviations and terms
                                                              • Abbreviations
                                                                • Terms
                                                                • Appendix – The Consumer

                                                                    • Figure 52: Banks used in the last 12 months, primary institution, total and Black, July 2017-August 2018