For millions of American consumers, the COVID-19 pandemic has brought financial concerns to the forefront. At the end of 2019, about 10% of consumers in the United States expected their personal finances to get worse in the following six months. By June — three months after COVID-19 was declared a global pandemic, that number grew to 21%. Even now, an additional 27% of consumers say their financial situation is tight or struggling.
In addition to those dealing with financial strife, many are also shifting the ways in which they handle their finances due to the limitations on in-person activities during the pandemic. Below, we take a look at five things you need to know about consumers and their finances in 2020.
Gen Z Feelings on Finances
Consumers at different life stages have been impacted in different ways during the pandemic. Sixteen percent of Gen Z respondents reported being temporarily laid off or placed on furlough, making them 33% more likely to say so compared to the average respondent.
Naturally, consumers at different life stages also have different attitudes about their personal finances. Take a look at the distinctions between Gen Zs and Baby Boomers when it comes to subjects like managing money and saving. For financial institutions, helping Gen Zs become more financially literate and confident in their money managing abilities could pay dividends in the form of future loyalty.
| Statement | Gen Z (% Yes) | Baby Boomer (% Yes) |
| I am good at managing money | 44% | 60% |
| My future financial security is very important to me | 44% | 64% |
| I look for advice when making big financial decisions | 39% | 28% |
| I only save money for specific needs | 23% | 6% |
Adopting Online Banking
The way consumers do their banking continues to change. Aided by the restrictions wrought by the pandemic, nearly two-thirds of U.S. consumers say they use online banking at least weekly. That number, of course, is driven by high adoption from Gen Zs and Millennials (68%), as well as Gen X and Baby Boomers (62%). However, it is even more notable that almost half of the Silent and Greatest Generations — those of 78 years of age and up — are online banking on a weekly basis, too.
Potential Pitfalls
Online banking is also gaining momentum because it saves time compared to the in-person experience. Even before the pandemic, a third of tradition retail bank consumers said it was a time-consuming experience because of waiting in lines or being placed on hold. However, to encourage more consumers to engage with online banking, financial institutions will have to ensure that signing up is seamless and customers feel that their data is secure. Over 40% of Gen X and Baby Boomers worry about data security, and nearly one in five consumers said it took multiple attempts to sign up for online banking.
Movement Toward Mobile
When it comes to mobile payment services, Gen Zs and Millennials vastly outpace their elders in adoption. Forty percent use mobile payment services on a weekly basis, as opposed to 13% among Gen X and Baby Boomers. In terms of services of choice, younger consumers are more likely to resort to options like Venmo, Apple Pay, or Cash App. On the other hand, Gen X and Baby Boomers are the predominant users of PayPal, with 67% of those respondents having used it in the last month.
Earning Consumer Loyalty
According to research from Cornerstone Advisors, only 7% of consumers have multiple products with their bank — a sign of entrenched loyalty. Instead, over half of consumers say they use at least two banks and have multiple cards across the major networks like American Express, Discover, Mastercard, and Visa. To earn real loyalty, it’s best to start with customer service. Six in ten consumers say that bad customer service would be their primary concern when deciding whether or not to buy from a brand. On the other side of the coin, 40% say that great customer service would motivate them to promote the brand online.
If your brand is looking to differentiate itself from the competition and earn loyalty from consumers, contact us today to learn how our suite of integrated marketing services can help.
Source: "New Expectations in U.S. Retail Banking." GlobalWebIndex (2020).