In August, Raddon hosted two in-person roundtable events, and we got the inside scoop on methods, ideas and changes your fellow financial institution professionals have been contemplating or implementing. While many have concerns and challenges regarding the economic landscape, attendees engaged in great discussions on ways to improve their institutions as a whole and help accountholders.  

Are We in a Recession? 

Recession, recession — are we in one? Going to be in one? Or are we not even near entering one? As financial institution professionals, we understand that based on economic data and information from the Federal Reserve, we are not currently in a recession. What we learned, however, is that the majority of our consumers do not feel that way.  

Figure 1: Percentage of Consumers Who Believe We Are Currently in a Recession

Household Income, Level of Savings and Debt All Influence Perceptions of the Recession

Source: Raddon Research Insights, 2024 Economic Sentiments

One common theme we discussed during our meeting was that your current life stage can easily influence your perception of the economy. While that may seem obvious, when you work in the financial world, it can be easy to have your economist glasses on and forget that many of our accountholders and consumers do not have the same experience.

Our discussion in California can really amplify this sentiment. In the Los Angelas area, there are many affluent consumers, and going up to San Jose, a city filled with tech giants, you see the same. In these areas, we are used to seeing accountholders ask for auto loans for the newest car and manage their direct deposit from their high-end job in the tech industry. Or we are used to just talking with accountholders who are living luxuriously. Seeing these high income–earning accountholders and understanding the economic landscape, we could easily forget that outside of these areas, many consumers have the opposite experience and understand the current environment to be within their personal definition of a recession.

We can see this thinking in figure 1. The less they have in investments, the more likely a consumer will believe we are in a recession. The same principle holds for levels of debt accumulated over the last three years. Essentially, the less money you have invested or are able to save, and the more debt you have accumulated, the more stress you feel financially, which, in turn, helps fuel personal feelings of currently being in a recession.

What Are Your Peers Doing for Growth?

One issue every financial institution professional agreed on during our meetings was that marketing is the key for growth strategies. Whether you are trying to promote a new product or high-interest deposit accounts, or gain new and younger consumers, your marketing is going to be the driving factor for success.  

Figure 2: Percentage of Those Who View Your Institution as Primary, by Generational Segment 

Checking Is the Entry Point for Younger Generations

Source: Raddon Relationship Survey 2024, group average

One interesting sentiment we covered, based on Raddon surveys on behalf of financial institutions to more than 60,000 consumers, was that while many consumers, regardless of generation, have their primary checking account at our institutions, that doesn’t mean that they view these institutions as their overall primary institutions. For example, 72 percent of Millennials and 70 percent of Traditionalists state that our institutions are the places that have their primary checking, but when asked if these institutions are their go-to primary institutions, that percent decreased by 10 or more.

When looking at Gen Z, however, that is not the case. We found that Gen Z is most likely to hold onto their institution and use it for other primary services, as long as they are using that institution primarily for their checking account as well.

So how are your fellow financial institutions marketing toward growth? Before pursuing new marketing campaigns and techniques, many of your peers are utilizing data to gain as close to a “full picture” of their accountholders as possible. One option to accomplish this is partnering with Raddon to gain accountholder demographic information or utilize AI tools that provide information within accounts to understand accountholder’s banking habits and transactions. After obtaining more accountholder information, then it’s time for the marketing geniuses to get to work.

Take Gen Z, in an example of this work. Have you listened to the way younger Gen Z consumers discuss their share accounts? We have found that the term “checking account” is not a common phrase used to discuss this particular share. Our clients have also found that younger accountholders like to view their shares in terms of “saving” and “spending.” One client in San Jose has taken that information and used it to its advantage. To appeal to younger consumers and try to gain them as new accountholders, this client has developed an account specifically titled “spend account” and created a campaign designed to appeal to their needs and wants. Accountholders can have a share for saving, in addition to a share for spending. This strategy has been successful at this institution and sparked a great discussion among other institutions during the roundtable. 

Figure 3: Most Likely to Engage With an Ad If It Is More Personalized Based on My Interests

Personalization of Messaging Matters

Source: Raddon Research Insights, Marketing to the Modern Consumer, 2023

If you needed more emphasis on the importance of personalization and data usage, look no further than figure 3. In our marketing study with Raddon Research Insights, we found that more than half of Gen Z and Millennials agree that personalization matters when receiving marketing or messaging from their institution. So, it is safe to say that utilizing data and AI within accounts gives you an advantage among many of your consumers if used properly.

Another important marketing practice one of our clients discussed was getting their institution’s information to those who are, perhaps, unbanked or not receiving the services they need. Marketing is an important factor in not only getting your mission to these communities, but also spreading awareness and education. This client understands that new accountholders don’t always have to be more affluent consumers or those who are currently at another institution, but can be those who are in need of banking services and financial education overall.

Where Do We Go From Here?

This article just scratches the surface of many important and engaging conversations among your peers, and it is important to understand the strategies of others. Understanding the needs of your accountholders, their banking habits, and their economic concerns is going to help not only keep your current consumers engaged, but attract new ones as well.

Key Takeaways:

• Modernize your marketing techniqus

   

• Include newer language in marketing campaigns, such as “spend account”

   

• Consider ways to understand data and habits among your accountholders, for personalization

   

• Remember that not all consumers have the same amount of financial educatio

   

• Understand that one person’s economic situation and financial burdens may be different from the next person’s; definitions of economic terms like “recession” tend to be personal

   

  By constantly evolving and adapting to a new way of understanding your accountholders, you are one step ahead at creating and maintaining those long-lasting accountholder relationships.
  

  Be sure to register for one of our future in-person roundtables!

  • October 17 – Madison, WI

     

  • October 23 – Boston, MA

     

  • October 24 – Atlanta, GA

     

  • November 13 – Philadelphia, PA

     

  • November 14 – Baltimore, MD

     

  • November 19 – Chicago, IL

  Register here!