The Financial Services Industry continues to change on many fronts and Merkle stays on the forefront of those changes. We are excited to bring you the May edition of Merkle’s Financial Services Industry News – a compilation of recent happenings within the industry, combined with thought leadership from Merkle’s broad and experienced Strategy Team – providing insight into the changing world of Financial Services. This edition explores changes in American savings rates, technology in branches, mortgage lending made simpler for Millennials, as well as significant developments in wealth management and insurance, and economic and regulatory implications.
The Thought Leadership section shares a presentation recently delivered at the Marketing to Millennials for Financial Services Summit by Merkle’s Senior Strategist, Darcy Hoffmann, and Regions Bank’s VP of Content Marketing, Katherine Mears. This presentation provides a hands-on, practical application of understanding the millennial market, their preferences and behaviors, and how to tailor interactions that resonate and delight these customers to grow your millennial customer base.
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This month’s edition includes the following topics:
- Interest Rate Overnight Averages
- General Industry: Gallup: Two-Thirds of Americans Prefer Saving to Spending
A recent Gallup poll shows that 65 percent of Americans polled prefer saving to spending, marking an all-time high. In contrast, the share of spenders and savers was equally matched in the early 2000s prior to the recession. For the first time since 2006, half of respondents rated their personal financial situation as excellent or good.
- Technology & Innovation: Citibank Is Testing a Hot New Technology in Its Branches
Citibank is testing use cases for beacon technology in some of its Smart Banking branches in New York City. The technology would enable customers to use their smartphones to access branch ATMs 24 hours a day and receive location-based, customized messaging about special promotions and events.
- Cards & Payments: Consumers Are Using Credit Cards More Often
A report issued May 3, 2016 by the American Bankers Association (ABA) shows that spending on credit cards rose in the fourth quarter of 2015 by three percent for consumers with good credit ratings and by six percent for those with weaker credit ratings. There were 80 million new credit card accounts opened in the fourth quarter, up 16 percent on a year-over-year basis, with the number of new subprime accounts increasing 26 percent.
- Consumer Lending: Ellie Mae Launches Mortgage App Tracking Millennials
Ellie Mae's new Ellie Mae Millennial Tracker will track millennial loan trends across the United States, refreshing with new data during the first week of every month to provide updated demographic data about millennial home buyers. The tracker uses data from 66 percent of mortgages that closed since 2014, and were initiated on Ellie Mae's Encompass all-in-one mortgage management solution.
- Small Business: Wells Fargo to Launch Faster Loan to Fight Online Rivals
Wells Fargo plans to roll out a loan product geared toward small business customers that have been turning to faster online lenders. The San Francisco-based bank will begin offering FastFlex loans later this month, initially only to customers that have been with Wells Fargo for at least a year and expanded to non-customers early next year.
- Investments & Wealth Management: SigFig Partnership with UBS Features Equity Investment, Tools for Wealth Managers
The new strategic partnership between UBS Wealth Management Americas (WMA) and SigFig announced this week is “strategic” in more ways than one. The deal features both an equity investment in the automated investment platform and in new software solutions for UBS wealth managers.
- Insurance: Mutual of Omaha Tries Simplicity to Stir Disability Market
While individual disability income coverage is a tough sell these days for many insurance companies, a new, simplified disability income policy from Mutual of Omaha could help generate interest in the stagnant income protection market. The policy, marketed as Priority Income Protection, is the company's latest offering.
- Regulation & Security: Treasury Department Calls for More Oversight of Online Lending Industry
On May 10, the U.S. Treasury Department called for more oversight over online lending, which follows its call for public comment last July on various issues related to online marketplace lenders. Specifically, the Treasury sought feedback on "the various business models of and products offered by online marketplace lenders to small businesses and consumers, the potential for online marketplace lending to expand access to credit to historically underserved market segments, and how the financial regulatory framework should evolve to support the safe growth of this industry."
- Economy: Mortgage Rates Haven't Been This Low in Three Years
Freddie Mac reported on May 12 that the average 30-year fixed-rate mortgage fell to 3.57 percent — the lowest level since May 2013 — from 3.61 percent the previous week and 3.85 percent a year ago. The average 15-year fixed-rate mortgage dropped to 2.81 percent from 2.86 percent the previous week and 3.07 percent a year ago, while the five-year adjustable-rate mortgage slipped to 2.78 percent from 2.8 percent the previous week and 2.89 percent a year ago.
- Thought Leadership: Creating Financial Success for Millennial Consumers to Build Ongoing Trust
View the presentation Merkle and Regions Bank presented at the Marketing to Millennials for Financial Services Summit: Creating Financial Success for Millennial Consumers to Build Ongoing Trust, to see how we have been working together to better understand, target, attract, and retain this game-changing generation. Our presentation shares some of our lessonslearned, which we hope will provide you with a clear path to improve your company’s millennial marketing program.