Raddon Report

With the advent of alternative financial service providers, financial institutions may wonder if there is still value in being a consumer’s designated primary financial institution (PFI). If there is value, what opportunities are there to increase customer wallet share?

The credit card industry may very well have created a monster when it began offering rewards to consumers who use their credit cards. Consumers are now used to getting paid to use issuers’ credit cards and for many consumers, the decision to select a particular credit card hinges on the type of rewards offered.

In 2016, financial institutions are facing new challenges regarding deposit acquisition and deposit retention – challenges they have not had to deal with for a number of years due to an artificially-imposed low-interest-rate environment. With interest rates on the rise, institutions are struggling to determine how much they need to pay to grow and keep deposits, as well as the impact new rate offers will have on funding costs.

The stock market has experienced a number of volatile fluctuations since mid-August 2015. Much attention has been paid to the underlying causes of these fluctuations, with little discussion of consumer reaction to the instability. Recently, Raddon analyzed consumers’ investment activities during this time.

Much of the banking technology focus has been on meeting consumers’ expectations for anytime, anywhere transaction accounts, payments and lending. However, according to a recent Raddon study of high-income investors, a financial institution’s technology capabilities can also impact whether it will attract an investor’s business.

Financial institutions that continue to ignore their customers’ technological delivery presumptions and sentiments do so at their own peril. Taking these preferences into account can decrease an institution’s risk of becoming an anonymous transaction engine, instead serving as an encompassing service provider that plays a central role in customers’ financial lives.

Financial institutions continue to seek enhancements to provide a more seamless and secure mobile banking experience. One solution is biometrics in the form of a fingerprint scan. Such a biometric application has the potential to provide a more secure way to identify customers as well as enhance the appeal of mobile banking and its accessibility.

Wedged between Black Friday and Cyber Monday, Small Business Saturday® annually encourages support of small and local businesses. It’s also a good time to look at what’s changed for small businesses – and what hasn’t – since Small Business Saturday was introduced five years ago.

In the financial service industry, today’s normal is to try and understand the mindset, attitudes and preferences of the millennial consumer. What products and services are millennials using for their financial transactions? What do they really want from their financial institution and are their financial needs being met?