HOME EQUITY LENDING MONITOR 2017 (Nov 2017)

Activation, Retention, and Re-Marketing

Product Features and Pricing

Marketing Channel Mix

Key Finding from the Report:

Findings from Phoenix Synergistics previous reports in the Home Equity Lending Monitor Series (2006 to 2016) revealed that the proportion of homeowners who have
home equity credit has been stable.

Research Description and methodology

The Home Equity Lending Monitor was launched in 2001 to track and measure important issues in the home equity lending market.  This current project is the seventeenth in the series. The Monitor features a number of multiphase research elements including an extensive national consumer survey, a client presentation, and a strategically oriented project report.  This annual monitor will benefit the entire home equity team including market research, product management, database marketing, communications and advertising, and risk management.

National Internet Survey – 2,500 total online interviews with homeowners including 1,125 equity loan/line holders and 375 equity loan/line prospects.

Key Dates

May 26, 2017 – Charter fee/Intro pricing ends.

May 26, 2017 – Final acceptance of comments on questionnaire.

October 2017 – Initial results available.

November 2017 – Project Report available.

Strategic Objectives

  • Size the home equity market and evaluate trends in a changing environment.
  • Assess the impact of the housing and credit markets on consumer behavior.
  • Determine provider selection factors and measure satisfaction with current and/or past equity loan providers.
  • Identify key target markets.
  • Monitor the changing mix of marketing and distribution channels used for home equity lending.
  • Evaluate product features, new product concepts, and pricing structures.
  • Examine the consumer decision making process regarding home equity credit and competing credit products.
  • Identify strategies for acquisition, activation, retention, and remarketing.

Research Issues

  • For retail banks, the home equity market is extremely important.  It is an attractive market in terms of the types of borrowers it draws – serious, upper- income consumers.  Delinquencies are low compared to other forms of lending.  For both borrowers and lenders, it is a win-win.
  • This monitor has tracked ongoing trends and new developments in the home equity credit market annually since its inception in 2001.  A primary objective each year is to gauge the overall size of the market – as defined by current users and prospects.  Recent findings have suggested an improving market in conjunction with a recovering housing market.  However, rising interest rates may impact this market going forward.  Ongoing analysis of these trends is of critical importance.
  • Key measures assessed over time include activation and utilization rates of revolving equity lines, the purposes of using loans and lines, important criteria in choosing providers and products, response to fees and other pricing, and channel usage for marketing, acquisition, and customer service.  Of special interest is ongoing analysis of the perspectives and intentions of equity credit ex-users, with an emphasis on strategies and tactics for re-marketing. Phoenix Synergistics survey will provide a greater understanding of the consumer perception and usage of home equity credit.

MORTGAGE MARKET MONITOR 2017 (Apr 2017)

Decision Making and Application Process

Sources of Information and Advice; Education

Relationship Acquisition and Expansion

Major Competitive Lender Profile

Key Finding from the Report:

Findings from the Phoenix SYNERGISTICS 2016 Mortgage Market Monitor reveal that nearly six in ten homeowners report having a first mortgage. Incidence of first mortgages is found to be highly correlated with age, declining as age increases.

MM2 Prop Graphic

Research Description and methodology

The 2017 edition of the Mortgage Market Monitor is the second in this series and is being conducted to track and measure the many aspects of the consumer mortgage shopping and decision process.

National Online Survey – 2,000 total interviews with financial decision makers age 18+, with a particular focus on current homeowners and buyers entering the market.

Key Dates

January 27, 2017 – Charter fee/Intro pricing ends.

January 27, 2017 – Final acceptance of comments on questionnaire.

March 2017 – Initial results available.

April 2017 – Project Report available.

Strategic Objectives

  • Size the mortgage market and evaluate trends in a changing environment.
  • Examine the consumer decision making process and sources of information and advice regarding mortgages.
  • Identify strategies and key target markets for acquisition, expansion, and retention.
  • Determine provider selection factors and measure satisfaction with current and/or past mortgage loan providers.
  • Assess the impact of the housing and credit markets on consumer behavior.
  • Monitor the ongoing impact of refinancing.
  • Assess the competitive landscape – comparing major mortgage lenders.

Strategic Issues in the Mortgage Market

  • The 2016 inaugural edition of the Mortgage Market Monitor found a housing market that had stabilized and was in fact showing promising growth potential after many years of uncertainty.  This annual study is designed to assess and track trends related to the many elements of the consumer mortgage shopping and decision process – encompassing aspects such as product design, preferred information channels, the importance of pricing in relation to other features, and application and servicing channels.
  • Refinancing, almost always surprisingly active, continues to have some impact on the mortgage market.  Another important factor is the potential for rising interest rates in the near future and how this may affect consumers’ decisions.  Examining and evaluating the channel mix in the mortgage shopping, application, and servicing process is critical, particularly in terms of how newer channels relate and intersect with in-person or branch-based contact.
  • The 2017 Mortgage Market Monitor will assess the behavior and perceptions of a national internet survey of 2,000 consumers age 18+ – with a particular focus on current homeowners and buyers entering the market.

THE EVOLVING CONSUMER PAYMENTS MARKET (Dec 2016)

Cash, Checks, and Cards

Online and Mobile Payments

New Competitors

Key Finding from Previous SYNERGISTICS Research Surveys:

Based on findings from previous SYNERGISTICS surveys, it becomes evident that consumer usage of online PC bill payment has experienced incredible growth over the past decade and has now stabilized.  Are there opportunities for further growth.

Prop Graphic

Highlights of the Study

This study examines consumer payment behavior at the point of sale and online, as well as for bill payment. Current usage of various payment methods and consumer reaction to innovative payment options and technology are assessed.

 

National Internet Survey – The survey will include 1,000 Internet interviews with consumers age 18 or older.

Key Dates

September 23, 2016 – Charter fee/Intro pricing ends.

September 23, 2016 – Final acceptance of comments on questionnaire.

December 2016 – Project Report available.

Strategic Questions

  • How do consumers approach the wide array of options that exist for making payments and transactions? What are the preferences and relative share of activity for cash, checks, debit cards, credit cards, and prepaid cards? What perceived benefits and drawbacks do consumers associate with various payment methods?
  • Do consumers’ payment preferences vary among different point-of-sale locations? Does cash still hold a primary position for certain locations or purposes?  Can these preferences be shifted with new payment options or technology?
  • What is the overall profile of consumers’ bill payment behavior? Is bill payment via mobile phones and tablets displacing some PC-based activity?   How can financial institutions react to preferences for biller sites/apps vs. FI sites/apps?
  • What are consumers’ payment preferences for online purchases and transactions? Does this vary with type of transaction?  Have alternative payment options – such as PayPal Credit, Visa Checkout, or MasterPass – captured a significant share of this activity?
  • How are developments in payment technology – such as mobile payments at the point of sale, mobile person-to-person payments, and mobile card readers – impacting consumers’ payment behavior? Do consumers’ perceptions of the implementation of chip card (EMV) technology require a response from providers?
  • Which payment methods or options do consumers see as most – and least – secure against fraud and misuse?  How should providers respond to these perceptions?
  • Which customer identifiers – such as household demographics, attitudes, or current payment choices and behavior – are useful in evaluating the potential for new payment methods and options?  How should customers committed to traditional payment options – particularly checks and cash – be marketed to?

Research Issues

  • The consumer payments market continues to evolve as numerous innovations in technology and payment alternatives are introduced.  The adoption of EMV standards – chip cards – in the United States in response to widening concerns over payment security is one of the more significant developments in recent years.  Concurrent with this is the ongoing progress toward a digital wallet – a concept discussed for a decade or more but never quite realized.  The introduction of Apple Pay, Google Wallet, and similar options represent a significant “leap” in this area.  The eventual impact of these developments on contactless card products is a question of great interest among issuers, processors, and merchants.
  • At the same time, traditional payment options still have a role in consumers’ payment behavior.  Both industry and government data show that check writing frequency is declining.  However, previous findings by SYNERGISTICS suggest that there will be segments and purposes wedded to check writing for some time to come.  Similarly, recent data from the Federal Reserve indicate that the usage of cash for small value payments at the point of sale is far from dead, despite long enduring proclamations to the contrary from industry observers.  In addition, credit cards and debit cards are widely used and popular forms of payment.  Prepaid cards have found a particular niche for certain types of everyday expenses.
  • The emergence of third parties – such as telecommunications companies, Internet content providers, and P2P organizations – may pose a challenge to the traditional dominance held by banks in the payments area.  This study examines the scope of consumer payment behavior. [F248]

ENRICHING PREMIUM CARD PROGRAMS (Sept 2016)

Upscale Rewards; Enhanced Services

Revenue Potential

Marketing Strategies

Key Finding from the SYNERGISTICS Report:

Results reveal notable near-term potential for premium cards in the higher income market, with potential being particularly strong among those with income of $400K+.

A90 Prop Graphic

Highlights of the Study

This study examines consumer experience with premium credit cards.  Consumer reaction to upscale rewards, enhanced services, and pricing is also assessed.

National Internet Survey – 750 consumers age 18 or older with household income of $100K+.

Key Dates

September 2016 – Project Report available.

Strategic Questions

  • What is the overall environment for consumer usage of premium credit cards – including such aspects as number of cards used, monthly frequency of transactions, and charge volume?
  • Are there certain features or services that, from the consumer perspective, distinguish premium cards from other credit cards?  Do factors such as pricing, types of rewards, special services, credit line, and co-branding affiliation influence the perception of premium or prestige card status?
  • How strong is the potential for premium or prestige cards in the next year?  What features or services are considered “ideal” for such a card?
  • How large is the revenue potential for premium card programs?  To what extent do current premium card users pay annual fees?  How willing are prospects to pay fees for a premium card with the features and benefits they value?
  • What are the motivations – such as rewards, larger lines of credit, or distinctive appearances – for obtaining a premium card?  How widespread is usage of upscale services such as concierge, airport club access, travel upgrades, and special event tickets and are these services valued – particularly in terms of paying fees?
  • By what channels did users of premium cards get product information prior to obtaining a card?  Which channels were used for applying for an account?
  •  Can the premium card market be segmented on the basis of demographic traits, financial behavior, or consumer attitudes?  Which may be best to identify potential new adopters?

Research Issues

  • Whether gold, platinum, or titanium, premium credit cards remain popular among affluent consumers and frequent travelers. Competition is intense as card issuers scramble to stand out in the premium card market. These premium or prestige cards are attractive products for providers to offer and in most cases can provide guaranteed revenue from annual fees.
  • However, consumers are now beginning to look more closely at the premium card offerings to determine if the high-end features and services offered are worth the price.  The strongest competition among issuers tends to be in the realm of travel-related features and services and consumers are now gravitating toward those cards that can offer the greatest return in terms of travel-related rewards and benefits.
  • Marketing premium or prestige card offerings can be a challenge as card programs need to be fresh and unique, especially for the more affluent consumer. SYNERGISTICS survey will examine the features or benefits upscale consumers consider to be premium level, the marketing strategies necessary to attract these consumers to a particular card, and the revenue opportunities that exist for card issuers. [A90]

16TH ANNUAL HOME EQUITY LENDING MONITOR (Nov 2016)

– “Banks Ramp Up Push for Home-Equity Lines” – The Wall Street Journal, March 26, 2016

 

– “Home Equity Credit Lines Boom 20% in 2015” – USA Today, March 28, 2016

Strategic Issues in the Home Equity Market

  • For retail banks, the home equity market is extremely important.  It is an attractive market in terms of the types of borrowers it draws – serious, upper- income consumers.  Delinquencies are low compared to other forms of lending.  For both borrowers and lenders, it is a win-win.
  • This monitor has tracked ongoing trends and new developments in the home equity credit market over its various waves since its inception.  A primary objective each year is to gauge the overall size of the market – as defined by current users and prospects.  Recent findings have suggested an improving market in conjunction with a recovering housing market; ongoing analysis of that trend is of critical importance.
  • Key measures assessed over time include activation and utilization rates of revolving equity lines, the purposes of using loans and lines, important criteria in choosing providers and products, response to fees and other pricing, and channel usage for marketing, acquisition, and customer service.  Of special interest is ongoing analysis of the perspectives and intentions of equity credit ex-users, with an emphasis on strategies and tactics for re-marketing. SYNERGISTICS survey will provide a greater understanding of the consumer perception and usage of home equity credit.

Key Finding from a Recent SYNERGISTICS Survey:

Findings from SYNERGISTICS previous reports in the Home Equity Lending Monitor Series (2002 to 2015) revealed that the proportion of homeowners who have home equity credit has been stable.

HELM 2016 Prop Graphic

Research Description and Methodology

The Home Equity Lending Monitor was launched in 2001 to track and measure important issues in the home equity lending market.  This current project is the sixteenth in the series. The Monitor features a number of multiphase research elements including a background research, an extensive national consumer survey, a client presentation, and a strategically oriented project report.  This annual monitor will benefit the entire home equity team including market research, product management, database marketing, communications and advertising, and risk management.

National Internet Survey – 1,000 total interviews with homeowners including 450 equity loan/line holders and 150 equity loan/line prospects.  For comparison purposes, and to permit tracking from previous telephone surveys, the survey will be conducted using a two-prong approach with 80% of the interviews being conducted via the Internet and 20% by telephone.

 

Key Dates and Sponsorship

May 27, 2016 – Final acceptance of comments on questionnaire.

May 27, 2016 – Charter fee/ Intro pricing date.

November 2016 – Project Report available.

 

Strategic Questions

  • Size the home equity market and evaluate trends in a changing environment.
  • Assess the impact of the housing and credit markets on consumer behavior.
  • Determine provider selection factors and measure satisfaction with current and/or past equity loan providers.
  • Identify key target markets.
  • Monitor the changing mix of marketing and distribution channels used for home equity lending.
  • Evaluate product features, new product concepts, and pricing structures.
  • Examine the consumer decision making process regarding home equity credit and competing credit products.
  • Identify strategies for acquisition, activation, retention, and remarketing.

MORTGAGE MARKET MONITOR 2016 (Apr 2016)

Decision Making and Application Process

Sources of Information and Advice; Education

Relationship Acquisition and Expansion

Key Finding from the Report:

Findings from SYNERGISTICS 2015 Home Equity Lending Monitor reveal that eight in ten homeowners report having a first mortgage. Incidence of first mortgages is found to be highly correlated with age declining as age increases.

Prop graphic

Highlights of the Study

Since 2001, SYNERGISTICS has conducted its annual Home Equity Lending Monitor and based on client feedback has decided to launch an annual examination of the mortgage market.  The 2016 inaugural edition of the Mortgage Market Monitor is being conducted to track and measure the many aspects of the consumer mortgage shopping and decision process.  The Monitor features a series of multiphase research elements including a targeted background research, an extensive national consumer survey, a management presentation, and a strategically oriented project report.  This annual monitor will benefit the entire mortgage market team including market research, product management, database marketing, communications and advertising, and risk management.

 

National Online Survey – 1,500 total interviews with financial decision makers age 18+ with a particular focus on current homeowners and buyers entering the market.

Key Dates

January 29, 2016 – Charter fee/Intro pricing ends.

January 29, 2016 – Final acceptance of comments on questionnaire.

April 2016 – Project Report available.

Strategic Objectives

  • Size the mortgage market and evaluate trends in a changing environment.
  • Examine the consumer decision making process and sources of information and advice regarding the mortgage market.
  • Identify strategies for acquisition, expansion, and retention.
  • Determine provider selection factors and measure satisfaction with current and/or past mortgage loan providers.
  • Assess the impact of the housing and credit markets on consumer behavior.
  • Identify key target markets.
  • Monitor the ongoing impact of refinancing.
  • Evaluate the role of new channels such as mobile phones, tablets, and other devices.

 

15TH ANNUAL HOME EQUITY LENDING MONITOR (Nov 2015)

Strategic Issues in the Home Equity Market

  • The recovering economy coupled with a reinvigorated housing market has resulted in an increase in the prospect market for home equity lines of credit. In its 2014 Home Equity Lending Monitor SYNERGISTICS reported an increase in the number of home equity loan and line of credit prospects.  Recent media reports show that indeed demand for home equity credit is stronger. However, this trend should be monitored closely as events in the landscape could change.
  • It is always important to have a clear understanding of consumers’ shopping and decision making process when marketing home equity credit products. Does the primary checking provider or the mortgage lender have a lock on this market or do consumers do extensive comparison shopping? What product features, provider selection factors, and sources of information and advice are important to consumers? The recovering housing market makes it imperative for lenders to understand consumers’ shopping experience for home equity products.
  • What are consumers’ usage patterns for home equity lines of credit and loans? What are the major purposes for which these credit products are used? Are home improvements, debt consolidation, and emergencies still the top purposes or have consumers broadened their mix of purposes? What impact will upcoming resets on equity lines of credit have on current borrowers? There are a number of important segments in the home equity credit market that providers should consider including holders, prospects, ex-users, inactive holders, and rejecters. SYNERGISTICS survey will provide a greater understanding of the consumer perception and usage of home equity credit.

Key Finding from a Recent SYNERGISTICS Survey:

 Findings from SYNERGISTICS previous reports in the Home Equity Lending Monitor Series (2002 to 2014) revealed that the proportion of homeowners who have home equity credit has been fairly stable.

HELM 2015 Prop Graphic

Research Description and Methodology

The Home Equity Lending Monitor was launched in 2001 to track and measure important issues in the home equity lending market. This current project is the fifteenth in the series. The Monitor features a number of multiphase research elements including a background research, an extensive national consumer survey, a client presentation, and a strategically oriented project report. This annual monitor will benefit the entire home equity team including market research, product management, database marketing, communications and advertising, and risk management.

National Internet Survey – 1,000 total interviews with homeowners including 450 equity loan/line holders and 150 equity loan/line prospects. For comparison purposes, and to permit tracking from previous telephone surveys, the survey will be conducted using a two-prong approach with 80% of the interviews being conducted via the Internet and 20% by telephone.

 

Key Dates and Sponsorship

May 29, 2015 – Final acceptance of comments on questionnaire.
May 29, 2015 – Charter fee/ Intro pricing date.
November 2015 – Project Report available.

 

Strategic Questions

  • Size the home equity market and evaluate trends in a changing environment.
  • Assess the impact of the housing and credit markets on consumer behavior.
  • Determine provider selection factors and measure satisfaction with current and/or past equity loan providers.
  • Identify key target markets.
  • Monitor the changing mix of marketing and distribution channels used for home equity lending.
  • Evaluate product features, new product concepts, and pricing structures.
  • Examine the consumer decision making process regarding home equity credit and competing credit products.
  • Identify strategies for acquisition, activation, retention, and remarketing.