Three Things We’re Hearing
- Areas of opportunity for local banks
- Advertising spend down across channels
- Auto insurance spending won’t slow down
A two-minute read
Areas of Opportunity for “Local” Banks
- Epic surveyed 1,339 consumers across the U.S. and found differences in checking account preferences for consumers with “Local”, “National”, and “Online” banks
- Other areas of difference include:
- Online Bank checking customers are twice as likely to have a personal loan, student loan, or investment account with the same bank than customers at their National and Local Bank competitors
- Local Bank checking customers put less importance on digital capabilities than others, with only 14% of Local Bank customers having chosen their banks for that reason vs. 28% for National Bank customers and 44% for Online Banks
Advertising Spend Down Across Channels and Products
- The Epic Marketing Intensity Index (EMII) – which measures advertising spending across direct mail, online search, and paid digital channels – shows a consistent spend drop across most products through the end of Q2
- Student loans are the exception, given the seasonal nature of the product
- Both direct mail and online search were down 60%, with paid digital faring somewhat better, down only 14% from Q2 2019
Auto Insurance Acquisition Spending Won’t Slow Down
- Unlike consumer loan products, insurance and investment mailings are growing year-over-year, with insurance mailings leading the pack with a 13% increase over last year and investments up 75% (on a much lower base)
- Given the number of insurance ads we’re seeing on TV (Liberty Mutual, GEICO, Progressive, State Farm, Allstate, USAA, etc.), this doesn’t come as much of a surprise – GEICO auto insurance alone mailed 10.4 million mail pieces in June
Quick Takes
- As noted above, Student Loan demand always picks up in mid-summer, however the shape of the curve has been lower this year due to uncertainty surrounding the pandemic and back-to-school plans
- The question remains as to whether the curve is elongated, or if there will simply be less loan demand this year – to date, anecdotal data shows fewer loans at higher average balances
Going Forward
- Consumer lending executives are currently in a similar situation as educators when planning for the fall, with most waiting to see if they will execute on their “normal” or “hybrid” plans
Thank you for reading.
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Jim Stewart
www.epicresearch.net
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