A Look into Atypical American Banking

A Look into Atypical American Banking A Complimentary Study on: Superbanked and Unbanked Consumers Scarborough measures American life, capturing consumer and media research for the marketing and media industries. www.scarborough.com info@scarborough.com /ScarboroughResearch @ScarboroughInfo Consumer research firm Scarborough provides an analysis on the ten percent of American adults, residing in 12 million households, that are either Superbanked * or Unbanked *. This complimentary study on these atypical banking patterns examines the essential demographics, local markets, and media consumption patterns of Superbanked and Unbanked Consumers, providing ideas for how to target these consumers, and others like them, who might be in the market for money management help in the next year. *Superbanked Adults : 11,300,000 / Unbanked Adults : 12,200,000 / Scarborough Research Source: USA+ 2011 Release 2 1

Atypical Banking Complimentary Study By identifying the five percent of American adults that are Superbanked, Scarborough uncovers a financially-savvy consumer who financial institutions and banks might target with the knowledge that this consumer is open to the idea of diversifying their financial portfolio. By uncovering the five percent of American adults that are Unbanked, Scarborough provides insights into the ultimate prospective client for banks and financial institutions the consumer who has no assistance with their money management. Vice president of advertiser services for Scarborough, Alisa Joseph, provides commentary throughout this complimentary study giving industry-savvy insights as to the nuances and intricacies of targeting Unbanked and Superbanked Consumers. Revealing trends in banking, as well as discussing challenges facing financial institutions, Alisa s valuable perspective gives marketers and advertisers a tactical advantage in planning their outreach campaigns. This study further explores Superbanked and Unbanked Consumers, revealing where they can be reached and explaining marketing strategies that might be most effective when targeting these groups. By understanding the current landscape of atypical banking, financial institutions, marketers and industries that are branching out into financial services can glean what will be important to these consumers this year. UNBANKED Definition U.S. adults who live in a household that does not use a bank or credit union. SUPERBANKED Definition U.S. adults who live in a household that has multiple asset accounts at financial institutions, as well as some additional investments. Specifically, Superbanked adults have a checking, savings, money market account and certificate of deposits (CDs), and at least one of the following investments: stocks or stock options, bonds, mutual funds, money market funds, second home or real estate property and other securities or investments. Scarborough defines the different generations as: Generation Y: Age 18-29 Generation X: Age 30-44 Baby Boomers: Age 45-64 Silent Generation: Age 65+ Scarborough defines an index as: A comparison between the target percentage and the market percentage. Over 100 means the target population percent is higher than the market population percent for a given activity or attribute. Under 100 means the market population percent is higher than the target percent. 2

Superbanked and Unbanked Consumers Together Represent 10% of U.S. Adults Industries you wouldn t associate with banking are branching out into the financial services sector, says Alisa Joseph, vice president of advertiser services for Scarborough. By identifying these unique prospective clients, industries new to banking can capitalize on consumers traditional financial institutions may overlook. Superbanked Consumers 93% use credit cards, index 125 4X 2X More than 11.3 million or 5% of U.S. adults are Superbanked more likely than all U.S. adults to have money market funds (75% have these funds) more likely than all U.S. adults to have stocks or stock options (64%) 49% use online banking 44% use a credit union Unbanked Consumers More than 12.2 million or 5% of U.S. adults are Unbanked 55% have health insurance 24% have life insurance 23% use credit cards 31% more likely than all U.S. adults to look for a job in the next 12 months 9% plan to go back to school in the next 12 months 3

Older and Educated Superbanked Consumers Generations, Race/Ethnicity, Marital Status, Education and Home Ownership of Superbanked Consumers 10% 50 21% 74 Generation Y Generation X Race/Ethnicity Superbanked Non-Hispanic White 84% Black/African American 5% Asian/Other 6% Hispanic 5% Superbanked Consumers are 22% more likely than all U.S. adults to be married. 44% 128 Baby Boomers Highest Level Obtained High School Grad 24% College Educated 73% College Grad+ 43% Superbanked Consumers are 64% more likely than all U.S. adults to have at least a college degree. 164 25% 143 Silent Generation Homeowners 89% Rent/Other 11% 128 4

Unbanked Consumers Have Young Households Generations, Race/Ethnicity, Marital and Parental Statuses of Unbanked Consumers 28% 141 32% 113 27% 79 13% 75 Generation Y Generation X Baby Boomers Silent Generation Marketing Tip: Campaigns that explain the benefits of banking for families with young children will resonate with the Unbanked Consumers as many of them are women and parents. Age 12-17 Age 6-11 Age 5 & Under Children in Household 45% of Unbanked Consumers Race/Ethnicity 21% 25% 25% 112 133 137 115 Many new or early-assimilation Hispanic Americans have had negative banking experiences in other countries. With the recent diversification of local businesses into banking services, Hispanics who might be distrustful of traditional banks might be more open-minded about banking with a trusted neighborhood business. Alisa Joseph Unbanked Non-Hispanic White 38% Black/African American 21% Asian/Other 4% Hispanic 37% Unbanked Consumers are 11% more likely than all U.S. adults to be women and 38% more likely to be unmarried. 5

Atypical Bankers Can Go Against Stereotypes Annual Household Incomes of Unbanked and Superbanked Consumers Financial institutions tend to think of Unbanked Consumers as lower income and Superbanked Consumers as affluent. Though there is some truth to these concepts, it is essential for marketers and financial institutions to look beyond the stereotypes in order to reach less frequently accessed audiences on the atypical banking spectrum. Alisa Joseph 32% Unbanked Consumers Marketing Tip: By understanding household income diversity, you can create targeted messaging that will reach Unbanked Consumers who have a higher household income or Superbanked Consumers who are on a fixed income. 308 Less Than $20,000 28% 13% 12% 234 $20,000 - $24,999 175 $25,000 - $29,999 19% 130 $30,000 - $39,999 Superbanked Consumers 8% 67 $40,000 - $49,999 16% 30 $50,000 or More 43% of Superbanked Consumers with an annual HHLD income of under $50K are retired. 18% 19% 18% 11% 6% Less Than $50,000 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 - $249,999 $250,000 or More 6

Superbanked Consumers Money Management Credit Card Usage and Popular Financial Services of Superbanked Consumers Marketing Tip: Superbanked Consumers have diverse assets that require high-level management. Money managers targeting this group can showcase how they might add value to an already robust financial portfolio. Type of Financial Services and Investments Used Accountant Second Home/Real Estate Property Stockbroker Online Investing/Stock Trading Real Estate Agent Buy/Rent/Sell Home Financial Planner 260 234 237 280 256 181 11% 16% 20% 27% 34% 33% 0% 10% 20% 30% 40% 50% Any Visa Any MasterCard Major Department Store 93% of Superbanked Consumers have used a credit card in the past 3 months. They are 25% more likely than all U.S. adults to do so. Any American Express Type of Credit Card Used Discover Gasoline 11% 30% 29% 23% 48% 68% 7

Unbanked Consumers Alternative Banking Credit Cards, Financial Services & Money-Saving Methods of Unbanked Consumers Unbanked Consumers are reticent of banking in general, but this is why alternative financial services might target this consumer group. Unbanked Consumers might not be open to traditional banking methods, but we can see that they still have financial needs and participate in money management systems. Alisa Joseph Coupon Usage by Unbanked Consumers In-Store Coupons 29% Newspapers 29% 7% of Unbanked Consumers used a check cashing service in the past 12 months and those with wireless/cell phones are more than twice as likely as all U.S. cell phone owners to use a prepaid wireless/cell phone Mail In-Store Circulars Product Packages Preferred Customer Card/Loyalty Card Magazines Email 17% 12% 9% 9% 8% 6% 0% 10% 20% 30% 40% 50% 23% of Unbanked Consumers have used a credit card in the past 3 months. Type of Credit Card Used by Unbanked Consumers Any Visa Any MasterCard Major Department Store Gasoline Discover Any American Express 3% 2% 2% 2% 8% 16% 8

How They Spend as Important as How They Save Shopping Habits, Amounts Spent & Plans to Purchase for Superbanked Consumers By gaining the loyalty of the Superbanked Consumer, businesses can build a relationship with a clientele they can count on to have the financial flexibility to shop most consistently. Alisa Joseph Personal Items Purchased and Amount Spent Household Items Purchased and Amount Spent Personal Items Bought (past 12 months) Superbanked Avg. Amt Household Items Bought (past 12 months) Superbanked Avg. Amt Cosmetics/Perfumes/Skin Care 51% $163 Women's Casual Clothing 48% $250 Men's Casual Clothing 45% $220 Athletic Shoes 44% $161 Women's Shoes 39% $191 Hardware/Building/Paint/Lawn/Garden 86% $583 Television 31% $968 Furniture 26% $1,317 Camera or Accessories 24% $409 Draperies/Blinds/Other Window Treatments 21% $625 Household Items Owned Superbanked Household Items Has High-Definition Television (HDTV) 91% Digital Camera 78% DVD Player (excluding Blu-ray) 77% 9

Unbanked Consumers Still Spending Money Shopping Patterns, Amounts Spent and Plans to Purchase for Unbanked Consumers Marketing Tip: Unbanked Consumers may have lower annual household incomes than many other Americans, but they do still have money to spend. Businesses should take the time to reach this often overlooked consumer group. Unbanked Consumers may not have the same amount of money to spend as Superbanked Consumers, but they still have consumer needs like all other Americans. They don t spend as much, but they represent a significant revenue opportunity. Alisa Joseph Personal Items Purchased and Amount Spent Household Items Purchased and Amount Spent Personal Items Bought (past 12 months) Unbanked Avg. Amt Household Items Bought (past 12 months) Unbanked Avg. Amt Cosmetics/Perfumes/Skin Care 28% $111 Children's Clothing 27% $170 Women's Shoes 26% $122 Women's Casual Clothing 25% $156 Athletic Shoes 24% $139 Hardware/Building/Paint/Lawn/Garden 28% $385 Television 22% $645 Furniture 12% $838 Mattress 11% $596 Draperies/Blinds/ Other Window Treatments 10% $250 Household Items Owned Unbanked Household Items Has High-Definition Television (HDTV) 44% DVD Player (excluding Blu-ray) 35% Digital Video Recorder (TiVo, etc.) 26% Satellite TV Subscription 26% 10

Superbanked Consumers Online Banking Internet Usage and Online Behaviors of Superbanked Consumers There has been a big push toward online banking from financial institutions in recent years. Affluent consumers have typically been the targets of this outreach as they present a unique opportunity for banks to manage multiple assets and review complex portfolios in one place. Alisa Joseph Access the Internet Monthly Superbanked 111 83% Internet Financial Services % of Superbanked Adults Online Banking 49% 157 Online Bill Pay 48% 159 Amount Spent Annually Online * $1,000 or More 155 32% $500 - $999 20% Ways Used Internet Past 30 Days * Search Weather Maps/GPS Social Networking Pay Bills 74% 67% 65% 56% 53% $250 - $499 $100 - $249 Less Than $100 7% 15% 11% *Base = Superbanked Internet Users 11

Unbanked Consumers Use Social Media Internet Usage and Social Media Patterns of Unbanked Consumers Though they have no banking affiliation, Unbanked Consumers have a distinct online behavior pattern. These are consumers that can be reached very effectively online because we are aware of their social media habits. They may not be immediate candidates for online banking, but once you reach them, you already know how they like to spend time online. Alisa Joseph Access the Internet Monthly Unbanked 44% Amount Spent Annually Online * $1,000 or More $500 - $999 5% 7% % of Unbanked Adults Unbanked Consumers are 12% more likely than all U.S. online adults to engage in social networking in the past 30 days. $250 - $499 $100 - $249 Less Than $100 7% 10% 14% Social Networking Ways Used Internet Past 30 Days * Search Weather Music Maps/GPS 48% 45% 40% 30% 70% *Base = Unbanked Internet Users 12

Get the Media Scoop on Superbanked Consumers TV, Radio and Newspaper Media Consumption by Superbanked Consumers Marketing Tip: By understanding the media consumed by Superbanked Consumers, marketers can more strategically plan their cross-platform targeted outreach. Type of TV Programs Typically Watch Percentage of Superbanked Consumers Who Read a Print Newspaper in the Past 7 Days by Section Local News 71% Main News/Front Page Local 78% 72% Movies 54% Entertainment/Lifestyle International/National 55% 54% Comedies 50% Comics Sports 53% 53% Top Radio Formats Editorial/Opinion 53% News/Talk/Information 31% Food/Cooking 52% Adult Contemporary Country 23% 31% 87% of Superbanked Consumers listened to radio in the past week. Advertising Circulars/Inserts/Flyers Business/Finance 52% 51% 13

Target Unbanked Consumers TV, Radio and Newspaper Media Consumption by Unbanked Consumers Marketing Tip: Advertise on networks, stations and in sections that have a higher concentration of Unbanked Consumers to ensure your messaging will be seen, heard and read by your desired audience. Type of TV Programs Typically Watched 1 4 Local News Movies Comedies 41% 65% 57% Unbanked Consumers are 94% more likely than all U.S. adults to watch music videos. Percentage of Unbanked Consumers Who Read a Print Newspaper in the Past 7 Days by Section Main News/Front Page Local Entertainment/Lifestyle International/National Comics 41% 40% 41% 62% 60% Top Radio Formats Pop Contemporary Hits Adult Contemporary Rhythmic Contemporary Hits 23% 18% 18% 82% of Unbanked Consumers listened to the radio in the past week. Sports Editorial/Opinion Food/Cooking Advertising Circulars/Inserts/Flyers Business/Finance 43% 34% 38% 39% 32% 14

Atypical Bankers Visit Media Websites Digital Media Consumption of Superbanked and Unbanked Consumers Marketing Tip: In terms of digital media, online Unbanked and Superbanked Consumers do not differ greatly from one another. Marketers may want to use these digital spaces to create campaigns that will appeal to both sides of the atypical banking spectrum. Of Online Superbanked Consumers in the past 30 days: o 24% visited a radio website o 40% visited a broadcast TV website o 41% visited a newspaper website Of Online Unbanked Consumers in the past 30 days: o 23% visited a radio website o 40% visited a broadcast TV website o 23% visited a newspaper website 15

Reaching Atypical Bankers on the Road Out-of-Home Transportation for Superbanked and Unbanked Consumers Regardless of their banking style, most people have a life that involves spending time outside of their home. For example, shopping centers are entrenched in digital signage as it reaches consumers where they spend time. With financial services so connected to the retail industry, it is important that consumers see messaging where they are spending money. Alisa Joseph Time Spent Commuting to Work Past 7 Days Total Adults Superbanked Unbanked % % % Less Than 30 Minutes 40% 37% 94 29% 74 30-59 Minutes 12% 13% 107 7% 57 One Hour or More 4% 4% 105 4% 108 Do Not Usually Commute 4% 5% 124 3% 68 Not Employed 40% 41% 101 57% 141 75% of Superbanked Consumers and 41% of Unbanked Consumers shopped at any mall in the past 30 days. Miles Traveled Past 4 Weeks Total Adults Superbanked Unbanked % % % 199 Miles or Less 37% 28% 75 67% 179 200-499 Miles 29% 31% 107 21% 71 500 or More Miles 34% 41% 121 13% 38 Superbanked Consumer are 21% more likely than all U.S. adults to travel 500 miles or more per week. 16

Targeting Atypical Bankers in their Markets Top Local Markets for Superbanked and Unbanked Consumers The banking industry understands the necessity of local outreach and that individual local markets have nuances. Even though they might be offering a national service, retail banks have a unique local footprint. Alisa Joseph Superbanked Top Markets % of Market 7% Fort Myers, FL 153 7% San Francisco, CA 149 7% Orlando, FL 149 7% Philadelphia, PA 145 7% Green Bay, WI 141 7% Harrisburg, PA 138 6% New York, NY 135 6% Boston, MA 135 6% Washington, DC 133 6% Hartford, CT 131 Fort Myers, FL adults are 53% more likely than all U.S. adults to be Superbanked. El Paso, TX adults are 96% more likely than all U.S. adults to be Unbanked. Unbanked Top Markets % of Market 17% Harlingen, TX 337 17% Fresno, CA 326 11% Memphis, TN 213 10% El Paso, TX 196 10% Bakersfield, CA 194 9% Los Angeles, CA 171 8% Chattanooga, TN 162 8% San Antonio, TX 159 8% Houston, TX 149 8% New Orleans, LA 148 17 17

Atypical Banking Study Summary Using the insights within this banking study, as well as the rest of Scarborough s banking data, companies and brands can more efficiently target the five percent of American adults who live in a household that is Superbanked and the five percent of American adults who live in a household that does not currently participate in any banking. In addition to the details within this study, Scarborough s measurements consist of further banking insights including: trends in bank services, credit card use, investments and much more. Understanding Superbanked and Unbanked households enables financial services companies to play an essential role in the planning and management of two opposing but important consumer groups. Superbanked Consumers 43% of Superbanked consumers with an annual household income of $50K or less are retired. Fort Myers, FL residents are 53% more likely than all U.S. adults to be Superbanked. 93% of Superbanked Consumers have used a credit card in the past 3 months. They are 25% more likely than all U.S adults to do so. Not all Superbanked Consumers have high annual household incomes. Diversify messaging to include these lower income groups. Unbanked Consumers 45% have children under the age of 17 living in their household. Harlingen, TX residents are three times as likely as all U.S. adults to be Unbanked. 7% of Unbanked Consumers used a check cashing service in the past 12 months and they are more than twice as likely as all U.S adults to use a prepaid wireless/cell phone plan. May have lower incomes, but they still spend on consumer goods. 18

About This Report and Scarborough About Scarborough Methodologies Scarborough employs a two-phase methodology to collect consumer information: a telephone interview (which measures newspaper, radio, and local media website usage and demographics) followed by a mailed, self-administered consumer booklet and seven-day television diary. Scarborough is in-field collecting data 44 weeks of the calendar year to even-out any marketplace disruptions or seasonality issues. Data is released to Scarborough clients twice per year. Scarborough s annual sample size is 210,000 adults nationally. About Scarborough Scarborough (info@scarborough.com) measures American life. Our consumer insights reflect shopping patterns, media usage across platforms and lifestyle trends for adults. Media professionals and marketers use Scarborough insights to make smarter marketing/business decisions on things like ad placement, multicultural targeting, and sponsorship opportunities. The company's core syndicated consumer insight studies in 77 Top Tier Markets, its Multi Market Study and its national USA+ Study are Media Rating Council (MRC) accredited. Other products and services include Scarborough Mid Tier Local Market Studies, Hispanic Studies and Custom Research Solutions. Scarborough measures 2,000 consumer categories and serves a broad client base that includes marketers, advertising agencies, print and electronic media (broadcast and cable television, radio stations), sports teams and leagues and out of home media companies. Surveying more than 210,000 adults annually, Scarborough is a joint venture between Arbitron Inc. and The Nielsen Company. About Alisa Joseph Alisa Joseph is the vice president of advertiser services for Scarborough. Alisa is responsible for building from the ground up our first sales team and associated strategy focused on the advertiser. Alisa leads a 20+ member sales team in providing advertisers with strategic marketing and advertising solutions via syndicated and custom market research. Alisa spearheads advertiser product development and initiates and coordinates strategic partnerships with other major data providers to enhance advertiser product offerings. Alisa was the recipient of the CEO Award in 2001 for founding the AMS Division. Contact Members of the Press: Haley Dercher, hdercher@scarborough.com, 646-654-8426 All others: Brad Sherer, brad.sherer@scarborough.com, 480-659-7395 19