The recent recession left consumers with a powerful urge to do something about the state of their personal finances. The new consumer mindset is a potential threat to traditional banks and credit card companies as it opens the door to new types of financial instruments and services. The change is also bringing about more ad campaigns.
New data from the Federal Deposit Insurance Corporation shows that 8.2% of U.S. consumers are not using banks. When the additional under-banked consumers are added to the mix, the FDIC says that 28.3% of households are not using banks or are working with these institutions very infrequently. The number of consumers using traditional services has dropped in every major category and now stands at:
- Checking account 88%
- Major credit card 67%
- Major debit/check card 66%
- Savings account 62%
Analysts say there are several reasons consumers are shunning banks. For the most part, high overdraft fees and a general distrust of major banks seem pervasive.
For alternatives, consumers find prepaid debit cards especially attractive in order to keep themselves from running up debt. These services, offered by well-known providers like GreenDot and NetSpend allow consumers to also have FDIC insurance and accounts for savings and direct deposits. While lower income consumers may have once been the target audience for prepaid debit cards, 24% of the customers who use them have annual incomes exceeding $100,000.
Payday loan services also report that more consumers with incomes of $50,000+ are seeking small, low-hassle loans. All of this activity has not gone unnoticed by major banks who see new opportunity in offering smaller loans.
To promote themselves and the available low-hassle products, more financial services and banks will likely be increasing their marketing.
To learn more, check out the Audience Interests & Intent report on Potential Bank Switchers on Ad-ology.com.[Source: Fields, Gary and Jackson-Randall, Maya. Footnote to Financial Crises: More People Shun the Bank. Online.wsj.com. 12 Sept. 2012. Web. 24 Sept. 2012]