Industry research group LIMRA says that banks should focus on loyal customers and Millennials if they want to expand their business.
In a report released on Dec. 17, LIMRA noted that most consumers have an old-fashioned idea of banks: 69% of people in the United States say they use their banks primarily to deposit cheques and pay bills while less than 25% think of them as a place to invest money or build wealth.
LIMRA's Banking on Loyalty survey compared the attitude of customers who have a financial plan through their bank or credit union with those who do not and found that the former are more likely to view the organisation as a full-service institution. Those who have a financial plan were also twice as willing to purchase insurance and investment products from their bank or credit union.
The study found that Millennials are also a promising growth market since they have more of their savings and investments at their primary bank or credit union than other groups; 40% indicated they would consider obtaining a financial plan through their bank compared to only 22% of other customers, and 60% of respondents from this group also said it was very important to have all their financial needs met in one place.
“Older Millennials are now in their 30s and starting to build wealth, buy homes, and start families,” comments Patrick Leary, corporate vice president of distribution research for LIMRA. “They are also less likely to have a relationship with a financial advisor or insurance agent.”