Attitudes and Expectations

Channel Strategies

Provider Loyalty and Competition

Key Finding from a Previous Report:

In the 2016 Phoenix Synergistics survey, Optimizing Small Business Checkingfindings revealed that excellent customer service and pricing were the top criteria for choosing a business checking provider. Do Millennial small business owners differ in their attitudes and decision making criteria?

Research Description and methodology

This study examines the financial profile of Millennial small business owners, including their attitudes and expectations, financial needs and behaviors, provider relationships, and channel usage.

National Internet Survey – The survey will include 800 online interviews with small business owners ages 19 to 36 – annual sales of $50K to $5M.  Industry categories include manufacturing, wholesale, retail, and services.

Key Dates

July 21, 2017 – Final acceptance of client comments on the questionnaire.

July 21, 2017 – Charter fee date.

September 2017– Initial results available.

October 2017 – Project Report available.

Strategic Objectives

  • Profile the financial activity of millennial-owned small businesses in terms of accounts and services used and provider relationships. Determine the demand for financial products in the next year. Evaluate the selection criteria or features millennial small business owners place importance on in choosing a financial provider.
  • Examine the attitudinal factors that frame or impact the approach to millennial small business owners. Assess their business objectives – including rapid growth, visible success to attract the attention of potential investors or buyers, or sustained growth for financial security and profitability. Explore if millennial small business owners have a sense of provider loyalty that can be a competitive advantage in relationship expansion.
  • Assess the degree of overlap in business and personal financial relationships among millennial small business owners. Determine which relationship was established first. Examine the factors or reasons that drive or account for these overlapping relationships.
  • Analyze the motivations or reasons behind the startup of businesses among millennial small business owners. Examine the sources of advice or guidance used in the startup process and used for ongoing operations of the business. Ascertain what financial resources or financing were used for startup.  Determine if these businesses have a formal business plan.
  • Measure the usage of various channels – including branches, ATMs, PCs, mobile phones, and tablets – for conducting financial activities. Determine if preferences vary by types of activity – such as account information, transactions, customer service, and marketing-related activities. Assess how widely these businesses rely on the online channel in marketing to their customers.
  • Determine which marketing and promotional channels have been utilized by millennial small business owners in obtaining financial accounts and services. Examine usage of online resources – including FI sites, social media, business networking forums or communities, and lending marketplaces. Assess what channels are preferred for applying for accounts and services.
  • Assess if millennial-owned small businesses should be approached using marketing strategies and tactics similar or different from those for small businesses as a whole.  Determine if traditional measures  – such as annual sales volume and number of employees – have the same relevance when developing strategies and tactics to approach this market.

Research Issues

  • A great deal has been written about millennials who are considered one of the most influential generational segments of today.  Millennial small business owners are an important force in the market. They have been described as savvy, creative, confident and optimistic.  Many millennials are entrepreneurial and starting their own businesses; others are taking over existing businesses previously run by their parents or other relatives.  Some have abandoned college to start their business reflecting their need to exercise control and flexibility over their career and future.  It is clear Millennial small business owners are a unique segment whose attitudes and expectations may be entirely different from other small business owners.
  • The financial needs and behaviors of millennial small business owners may be unique, requiring providers to be creative and think outside the box. Keeping up with the rapid pace of technological innovation is a given when developing and marketing products and services for this group.  Competition from Fintech and non-traditional providers extends to financial services including lending, online and mobile banking, and payment solutions.  These new competitors are a force to be reckoned with in serving Millennial small business owners who are considered to be less loyal – switching providers to meet their needs.
  • It is essential to understand the financial attitudes and expectations, behavior, and usage patterns of Millennial small business owners.  Usage of traditional and innovative channels needs to be assessed.  The overlap in personal and business financial behavior needs to be examined. Provider usage and selection factors need to be measured.  This study will assist providers in acquiring and retaining Millennial small business relationships.


The Decision Making Process

Traditional and Alternative Sources

Balancing High Tech and High Touch

Key Finding from the Survey:

A notable minority of those not using financial advisors or professionals have done so in the past. Directionally, this widens with age and is wider among the mass affluent and highly affluent. Providers should explore strategies for reconnecting with these customers.

Highlights of the Study

This study examines the experience of mass affluent households with financial advice and planning.  Sources of influence, preferences, and reaction to automated and non-traditional services are assessed.

National Internet Survey – The survey will include 1,500 online interviews with consumers age 18 or older. Asset quotas include: 200 – <$100K; 275 – $100K-$249.9K; 275 – $250K-$499.9K; 275 – $500K-$749.9K; 275 – $750K-$1M; and 200 – more than $1M.

Key Dates

July 2017 – Project Report available.

Strategic Objectives

  • Profile households’ savings and investment activity – encompassing accounts and services held, relative conservative/aggressive orientation, reasons started to save or invest, and approach to decision making.
  • Assess consumers’ approach to financial planning – including the perception of current planning efforts, dealings with advisors or professionals; the types of services, products, or areas addressed through the planning process; and the degree of confidence in current relationships.
  • Gauge the future potential for planning and advisory services – such as determining future specific financial needs, the likelihood of working with a professional or advisor, important criteria in selecting an advisor, and reasons for non-interest.
  • Explore the role of technology as competitive or complementary to traditional financial planning – examining usage of online personal financial management, online planning tools, and experience with robo advisors or robo investors.
  • Examine the process of implementing an advisory relationship – detailing the motivations for first starting to use an advisor or professional, the initial method of contact, what types of initial discussions or assessments took place, types of pricing arrangements, and moving or ending relationships.
  • Determine communication preferences in dealing with an advisor or professional  – covering aspects such as frequency and channels of contact, satisfaction with degree of contact, expected response times to a question or issue, and the importance of human contact for robo advisory services.
  • Identify, segment, and target those consumer households that are primary markets for financial planning services – utilizing variables such as age, household income, asset level – and attitudinal factors related to needs, perceptions, and priorities.

Research Issues

  • Households today are faced with a wide, and perhaps confusing, array of options and choices for obtaining financial advice and planning.  Traditional players – such as bankers, brokers, and financial planners – certainly continue to have a strong presence but are faced with challenges and opportunities related to technology adoption and integration, the expectations of emerging market segments, and non-traditional players.
  • Consumers are bombarded by offers of advice on household budgeting and finance, saving and investing, insurance needs, and estate planning.  How they sort through the deluge of magazine articles, blog posts, webinars, community forums, emails, and phone calls to determine what is valuable information or not is an important process to understand.  Concurrent to this, looking at the role of personal interaction – not just from financial representatives but also friends, family, or other reference group members is vital.  The level and depth of financial planning available to households also represents a wide spectrum.  Ascertaining what degree customer segments want – ranging from frequent face-to-face contact and guidance to a technology-driven “do it yourself” approach – is a key objective.  Determining how a “personal touch” and technology can interact to deliver value to customers is also important.
  • Prior work by Phoenix Synergistics has found that robo advisory services – despite being thought of as displacing the human element – have broader appeal when there is an option for contacting a representative.  How frequently customers want to be contacted, and by what channels, is a critical element in any advisory relationship.  Financial institutions and investment organizations are faced with the challenge of understanding the consumer perspective in designing and marketing their financial advisory and planning services – in terms of the degree of information, advice and recommendations, and transaction capability desired. [F254]


Gen Z and Millennials

Attitudes and Expectations

Checking, Cards, and Credit

Channel Strategies

Key Finding from a Previous Phoenix Synergistics Survey

According to findings from the 2013 Phoenix Synergistics study, Evaluating the Financial Needs of Students, college students and recent graduates were strong users of online and mobile banking channels.  Is this also true for the up-and-coming Gen Z and student group and what would be the ramifications for delivery system strategies?

F252 Prop Graphic

Research Description and methodology

This study examines the financial attitudes and behavior of high school and college students including Gen Z and Millennials.  Their channel usage and preferences are evaluated as well.

National Internet Survey – The survey will include 1,500 Internet interviews with high school and college students comprised of 750 ages 15 to 19 and 750 ages 20 to 25.

Key Dates

February 24, 2017 – Charter fee/Intro pricing ends.

February 24, 2017 – Final acceptance of comments on questionnaire.

May 2017 – Project Report available.

Strategic Questions

  • What is the basic financial profile of students in terms of accounts and services usage and provider relationships? What type of institution do they consider to be their main provider?  Do Internet-only providers have a strong presence in this market?  How extensive is usage of alternative financial providers – such as payday loan centers and pawn shops – by students?
  • How widespread is experience with deposit accounts – checking and savings – among students? In what time frame are these accounts opened?  What factors were important?  How much influence do parents or guardians have in choosing an account?  How are students accessing checking – checks, ATMs, or debit cards?
  • To what extent do students have and use credit cards? What factors or influences were important in obtaining a credit card?  Do debit cards and prepaid cards have a competitive role in the student card market?
  • How extensive is usage of credit products – particularly student loans and automobile loans – in the student market? What factors influence provider choice? How strong is the demand for new loans in the next year?
  • What payment methods are preferred by students for making purchases and why? Is the mobile channel – for POS transactions, P2P payments, and RDC – important in this market?
  • Is there an interest or demand among students for various financial education topics – such as budgeting, managing credit, or saving and investing? What sources – financial institutions, parents/guardians, schools, or government – would be regarded as credible for this type of information?
  • How can students be segmented and targeted for marketing strategies?  Beyond age-based schemes, do variables such as class or grade, sources of income, and dwelling status lend themselves to specific tactics?

Research Issues

  • The large high school and college student market is the up-and-coming consumer group of the future.  This group is comprised of both Gen Z and younger Millennials.  For the past decade, it has been all about the Millennial segment – now here comes Gen Z on their heels.  Having had the recession as the backdrop of their childhood, many industry watchers believe Gen Z will be more financially conservative than Millennials.  As a whole, the student market represents a key launching point for selling financial products and services.
  • To design successful marketing strategies and products for this segment, many questions need to be answered concerning the financial attitudes and behavior of students.  Will this group use traditional banking products such as checking or will they opt for more innovative alternatives?  What is their attitude toward credit and student loans?  Will they prefer credit cards, debit cards or prepaid cards?  Another key issue for providers is the long-term nature of financial relationships established with students.  The provider loyalty of this group may be questionable, particularly with the wide range of competitors vying for a share of the student market – from traditional financial institutions to new online and fintech organizations.
  • This group has grown up with the internet in their pocket and social media as an ever-present part of their daily life. It is essential to evaluate the mix of traditional and innovative banking and payment channels being used by this segment.  In addition, it is important to identify key influencers for this market such as parents, friends, social media, financial representatives, and others.  Educational materials and information about products and services will need to be designed to assist this group in making informed decisions.  Engaging students early and winning their loyalty will be critical to the future growth and profitability of any organization. [F252]


Changing Attitudes and Expectations

Decision Making Process; Advisory Services

Channel Optimization

Key Finding from a Previous SYNERGISTICS Research Survey:

Results from SYNERGISTICS 2013 study, Generational Marketing Strategies: Gen Y, Gen X, & Baby Boomers, found that Millennials were more likely than Gen X and Baby Boomers to be using mobile banking.  How has this picture changed over the past several years.

F246 Prop Graphic

Highlights of the Study

This study will assist providers in developing financial services products, programs, and marketing strategies to target each of these important market segments: Millennials, Gen X, and Baby Boomers.

National Internet Survey – The survey will include 1,000 Internet interviews comprised of a minimum of 300 in each of the following age ranges: Millennials ages 18-35, Gen X ages 36-51, and Baby Boomers ages 52-70.

Key Dates

July 22, 2016 – Charter fee/Intro pricing ends.

July 22, 2016 – Final acceptance of comments on questionnaire.

October 2016 – Project Report available.

Strategic Questions

  • How is financial behavior and activity different – or similar – among Millennial, Gen X, and Baby Boomer households? Does usage of and demand for accounts and services vary by segment?
  • How do selection factors and criteria for choosing a financial provider differ among generational segments? Which segments are attracted to alternative or non-traditional providers?
  • How do the generational segments differ in terms of payment habits and preferences? What is the activity profile for various payment methods – including checks, debit cards, credit cards, and prepaid cards.  What are the preferred payment mechanisms for e-commerce?
  • Which financial goals or objectives have the highest priority among the generational segments? Are traditional goals – such as buying a home or saving for a child’s education – being supplanted by other issues or concerns?  What financial education topics have the widest appeal to each generation?
  • How do the generational segments differ in channel behavior when shopping for financial products – both in terms of obtaining information or advice and applying for an account or service? How much impact does social media have on the account acquisition process?
  • How do the generational segments differ in their comfort level and usage of innovative technologies for financial services? Is online access by PC becoming “mainstream” across all groups?  What is the relative potential for mobile innovations such as RDC, P2P payments, and mobile payments?  To which segments do wearables have the most appeal?
  • Aside from the obvious age segmentation, what traits, behaviors, and attitudinal variables are useful for designing generational marketing strategies and tactics?

Research Issues

  • Most financial services providers recognize the importance of having strategies for marketing to the three population segments that currently dominate the financial services marketplace – Baby Boomers, Generation X, and Millennials. Each of these groups has a unique set of generational experiences that may influence their approach to financial services and make their behavior unique.
  • Baby Boomers, born between 1946 and 1964, are currently ages 52 to 70 and the older members of this group are now entering retirement.  Many Baby Boomers may be redefining what is meant by retirement as a result of recent economic turmoil. Generation X members are currently ages 36 to 51 and have entered mid-life characterized by expanded financial services needs.  Generation Y – also known as Millennials – are currently ages 14 to 35.  This group is in the life building stage and at the beginning of their financial life cycle.
  • This new survey examines their usage of financial services and various types of providers.  It assesses how the decision making process may differ among the groups including their usage of professional advisors. The channel usage of each group will also be examined. SYNERGISITCS will identify how best to connect with and market to each group.  It is essential for providers to have an understanding of each of these groups in developing and refining their generational marketing strategies and programs. [F246]