Four Things We’re Hearing
- Financial services ad spending rebounds
- Visa and Mastercard issuers shrink in 2020
- Millennials bank just like us
- Cash-back credit cards are in vogue
A two-minute read
Financial Services Ad Spending Rebounds
- Financial services ad spending in all channels (digital, direct mail, paid search) has rebounded since the sharp drop in April 2020
- Spending on credit card and checking has recovered to levels 70 – 80% of previous peaks, while personal loan spending has remained depressed
- Keyword search costs have recovered for checking/savings faster than other products, with the exception of student loans, which was the least affected of any product in 2020
- Direct mail remains the dominant channel of marketing spend for new customer acquisition for all products, despite dropping slightly in the fourth quarter
Visa and Mastercard Issuers Shrink in 2020
- 2020 rankings of Visa and Mastercard issuers reflect the pandemic-related shrinkage of card portfolios, with all issuers except Navy FCU and Goldman Sachs showing lower receivables than in 2019
- There has been little movement in the rankings in the past five years, though some issuers have posted significant gains:
- Citi (+27.1%) was the fastest growing large issuer during the period, fueled in part by taking over the Costco and L.L.Bean cobrand programs
- Credit One (+81.3%), Alliance Data (+79.5%), Navy Federal Credit Union (+75.9%), and Merrick Bank (+34.2%) were the other notable fast-growing portfolios
- Goldman Sachs reached the top 20 following its 2015 Marcus debut
Millennials Bank Just Like Us
- Millennials, those currently 26 – 40 years old, tell us that some of their banking preferences are not much different than those of older consumers
- For example, 94% of millennials surveyed say they have accounts with banks that have branches in their local community, comparable to older and younger groups
- Most of those surveyed said they chose banks with local branches so that they could make in-person deposits and cash checks, with no-fee ATMs and “security of having a branch if needed” coming next
- Credit and debit cards were used equally for “daily purchases”, with credit cards being the most popular choice for “larger purchases” in the older demographics
- PayPal was the most popular alternative payment method selected by all age groups, with Venmo and Apple Pay next most popular with younger consumers
Cash-Back Credit Cards are in Vogue
- Online search volume for the term “credit card” has trended higher since 1Q 2020
- While searches for “Travel Rewards Card” and “0% Credit Card” are down, “Cash Back Card” keyword search trends are up
- These trends reflect the increasing preferences for cash-back cards and decreasing preferences for travel cards reflected in previous Epic surveys
Quick Takes
- SoFi is buying a bank, which should provide more stable, low-cost deposits and more uniform regulatory structure
- Texting is a growing means of communication amongst banks, with consumers showing a willingness to receive messages from their financial institutions
Thank you for reading.
The next Epic Report will publish on April 3rd.
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Jim Stewart
www.epicresearch.net
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