Forrester Research: Forrester Retail Insights Financial Services First Look: Research & Event Highlights From Forrester

 15 July 2003
By The Numbers
54: percent of Americans who say they like technology -- a 17% rise since 1998.

38: percent of online Europeans who research financial products online. Twelve percent also use the Net to buy these products.

51: percent of US consumers who don't believe that their primary financial services provider looks after the customer's best interests.


Hot Off The Press
Designing Financial Sites That Sell, by Ron Shevlin. Today's bank sites let consumers buy financial products but do a terrible job of selling.
Winning The Changing Financial Consumer, by Ekaterina O. Walsh, Ph.D. Customer advocacy drives retention and satisfaction more than any other attribute that we study.
Canadian Banks' Best Cross-Sell Prospects, by Catherine Graeber. Online Gen X/Y and baby boomer customers have the highest potential.
The Business Case For Right-Channeling, by Remus Brett. A proactive right-channeling strategy can cut transaction costs by 30%.


Upcoming Research
How Life Insurance Agents Use Technology, by Jaime Punishill
Best Practices In Online Bill Pay, by Catherine Graeber
How To Segment Investors, by Ekaterina O. Walsh, Ph.D.
Designing Successful Emails, by Ron Shevlin


Make A Move On Linux
"Linux delivers 'good enough' technology at a fabulous price. Wallflower firms should screw up their courage, get on the dance floor, and enjoy the benefits of Unix reliability at Intel prices." -- Ted Schadler in Financial Firms: Flirt With Linux.


US Online Bank Transacting And Securities Trading
US Online Bank Transacting And Securities Trading

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Advocacy will win over the changing financial consumer

Our surveys of almost a million US consumers since 1997 reveal a profound shift: Consumers are becoming more mistrustful, more insecure, and more hands-on in their financial lives.

How will your firm hold on to these changing customers? The answer is an attribute we call customer advocacy -- which means offering products and services that are best for the customer, not just for the firm's bottom line.

Customer advocacy drives loyalty and satisfaction

Why are we so sure that customer advocacy is the answer? We modeled 36 different attributes, and advocacy is by far the top predictor of consumers' loyalty to their primary financial provider, surpassing factors like trustworthiness, service, and advanced technology use.

Our statistical models also show that advocacy contributes the most to customers' satisfaction with their primary financial provider.

Banking Institutions' Customer Advocacy Finding the customer advocates among financial firms

Which financial firms are seen as least mercenary? Among banking institutions, the leaders are credit unions, private banks, and local banks. In wealth management, The Vanguard Group, Edward Jones, and Fidelity Investments lead.

How do firms demonstrate advocacy? They allay fears and help customers reduce fees. For example:

  • Vanguard is crystal clear about its fund expenses and how they factor into the fees investors pay.
  • Banner ads on American Airlines Federal Credit Union's site don't trumpet products but link to advice on when to get an advisor or consolidate debt.
  • Royal Bank of Canada Vice Chairman James T. Rager told our 2003 Finance Forum audience that: "RBC contacts each customer at least once a year to tell them whether the package they have is best for them or if they're paying too much."
What else can firms do?
  • Demonstrate technology leadership. Firms that lead in customer advocacy like Vanguard and Fidelity are also seen by consumers as the most advanced in technology use.
  • Respond to retirement concerns. Bank Web site users are more worried about retirement than other customers. So smart firms will promote the retirement planning pages on their sites.
  • Show competitors' rates. Sixty-four percent of bank Web site users also visit financial content sites. So firms should show competitors' rates, even if they don't beat them, to demonstrate advocacy and sell customers on other factors that could influence their decision.
To get more of our ideas on what you can do to demonstrate customer advocacy, read the report, or talk to us. You can reach me at billdoyle@forrester.com. We look forward to hearing from you!


Bill Doyle
Financial Services Research Director

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