Myths, Misconceptions, and Enduring Truths: A Survey of Digitally Directed Consumers

by Bob Meara, September 18, 2013
Industry Trends
North America

Abstract

Celent highlights some myths and misconceptions as well as enduring truths about consumer preferences and behavior in banks’ increasingly digital retail delivery model.

The nature of retail delivery is changing rapidly, as a growing number of consumers acquire digital devices and come to prefer digital interaction. We call them digitally directed consumers. Alongside this growth is the continued advancement of self-service channel capabilities. This dynamic can render even relatively current operating assumptions about consumer preferences and behavior obsolete. For this reason, Celent conducted an online survey among 1,059 US Internet users in June 2013, to get a current snapshot of channel usage and preferences.

In the report Myths, Misconceptions and Enduring Truths, Celent exposes common falsehoods about the consumer retail banking channel preferences and what banks should do as a result. These changing consumer preferences are a result of the explosion of new devices.

“Consumer preferences are changing rapidly. Some misunderstandings were once true, but are simply outdated, while others are just plain myths,” says Bob Meara, Senior Analyst with Celent’s Banking Group and author of the report. “Perhaps the most egregious misconception is that young people have no use for the branch. While young adults transact digitally, they prefer to engage with their banks face-to-face. This presents a challenge to banks, who must invest in both their branch and digital channels to remain competitive.”

This report begins with a snapshot of digital behavior based on the survey, followed by an analysis of channel usage and preference by age, device ownership, and income. The report then looks at customer satisfaction and bank switching behavior as well as key factors leading to choosing their new bank relationship. Usage and attitudes of current and emerging digital channel capabilities follows. Finally, the report presents Celent’s multichannel mandate, a practical, three-part plan to improve sales results in an increasingly multichannel world.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

A Snapshot of Consumer Digital Behavior

3

The Branch Is Now an Alternative Channel

7

 

Consumers Transact Digitally But Engage Face to Face

8

Banks Get Better with Age

11

 

Switching Banks Is for the Young

12

If You Build It, They Won’t Come

15

 

What’s Valued and What’s Not?

17

The Multichannel Mandate

21

Appendix: Survey Demographics

25

Leveraging Celent’s Expertise

27

 

Support for Financial Institutions

27

 

Support for Vendors

27

Related Celent Research

28

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