THE VALUE OF AN INVESTMENT & INSURANCE CUSTOMER TO A BANK

Transcription

1 THE VALUE OF AN INVESTMENT & INSURANCE CUSTOMER TO A BANK 2012 by Strategic Business Insights and K&C Partners. Unauthorized use or reproduction prohibited.

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3 TABLE OF CONTENTS THE VALUE OF AN INVESTMENT & INSURANCE CUSTOMER TO THE BANK...1 Beyond Profit Contribution...1 The Data Source...1 PROFILE OF THE INVESTMENT SERVICES CUSTOMER AT A BANK...2 Investable Assets...2 Checking Balances...2 Savings Balances...2 Number of Banking Products...3 Credit and Remote Banking Products...3 CUSTOMER LOYALTY...4 MISSED OPPORTUNITY...6 Primary Financial Institution...7 Place for Savings & Investments...8 Trust in Banks...9 THE BANK OPPORTUNITY IN INVESTMENT & INSURANCE SERVICES...10 APPENDIX A MACROMONITOR SURVEY METHODOLOGY APPENDIX B SURVEY WEIGHTING PROCEDURES

4 THE VALUE OF AN INVESTMENT & INSURANCE CUSTOMER TO THE BANK

5 PROFILE OF THE INVESTMENT SERVICES CUSTOMER AT A BANK

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7 CUSTOMER LOYALTY

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9 MISSED OPPORTUNITY

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13 THE BANK OPPORTUNITY IN INVESTMENT & INSURANCE SERVICES

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15 APPENDIX A MACROMONITOR SURVEY METHODOLOGY

16 Appendix A QUESTIONNAIRE DESIGN MACROMONITOR SURVEY METHODOLOGY The MacroMonitor questionnaire maintains a design that has remained consistent for more than 30 years to measure consumer attitudes, behaviors, and motivations about financial services. In 2010, Strategic Business Insights (SBI s) Consumer Financial Decisions (CFD) group developed a draft questionnaire and submitted it to clients for suggested comments, deletions, and additions. Knowledge Networks (KN) programmed the questionnaire to allow online participation. All questions in the final MacroMonitor questionnaire are closed end or limited open end. Respondents enter actual dollar amounts of their balances, actual numbers of household members, and actual numbers at other numerical questions. DATA COLLECTION Introduction Knowledge Networks conducted the MacroMonitor survey on behalf of Strategic Business Insights Consumer Financial Decisions group. It conducted the survey on the KnowledgePanel. Sample Definition The survey consists of two household-level target populations. One is a general population sample of households headed by adults age 18 and older residing in the United States; the other is an oversample of affluent households those households with a total household income of at least $100,000 or total assets (excluding the home) of at least $500,000. To create the target population, Knowledge Networks randomly sampled households from its KnowledgePanel, a probability-based web panel that is representative of the United States. Individuals who completed the survey must be the primary decision maker for the household s financial activities or share the financial decisions with someone else in the household. KN asked individuals who were not active in the financial decisions to pass the survey to the decision makers in their household. Field Period Knowledge Networks pretested the online survey in June 2010 and conducted the main survey in June, July, and August The data collection field periods were as follows. A-1

17 Stage Start Date End Date Pretest 6/9/2010 6/14/2010 Main 6/28/2010 8/24/2010 Participants completed the main survey in 164 minutes (median). Sample Sizes and Survey-Completion Rates The number of respondents sampled and participating in the survey and the survey completion rates are below. Key Survey Response Statistics: Main Interview Invited Completed Completion Rate National % Sample Affluent % Sample Total % Researchers at SBI considered 4374 of the 4577 completed surveys valid. Survey-Cooperation Enhancements In addition to taking some standard measures to enhance survey cooperation, Knowledge Networks took the following steps: Sent reminders to nonresponders on day three of the field period Sent additional reminders to nonresponders on July 8, July 15, July 19, July 23, July 30, August 5, August 12, August 16, and August 20, 2010 Gave participants a cash-equivalent $20 for their participation Made participants eligible to win an in-kind prize through a monthly KN sweepstakes. A-2

18 APPENDIX B SURVEY WEIGHTING PROCEDURES

19 Appendix B SURVEY WEIGHTING PROCEDURES The MacroMonitor target for weighting to the national household population in the U.S. is economic household units a definition that allows households to have more than one economic unit. The U.S. Bureau of the Census defines households as persons sharing a common dwelling unit. The MacroMonitor definition of economic household includes families, individuals living alone, and two or more adults living together in a common dwelling who share basic finances. Thus, adults who live together but are unrelated and unmarried such as housemates, roomers, a cohabiting couple, resident employees, or adult children or other relatives who might contribute to the housing expenses but otherwise maintain separate finances count as separate economic households. The KnowledgePanel sample design began as an equal probability sample with several enhancements incorporated to improve efficiency. Since any alteration in the selection process is a deviation from a pure equal probability sample design, statistical weighting adjustments were made to the data to offset known selection deviations. These adjustments were incorporated in the sample s base weight. There are also several sources of survey error that are an inherent part of any survey process, such as non- coverage and non- response due to panel recruitment methods and to inevitable panel attrition. These sources of sampling and non- sampling error were addressed using a panel demographic post-stratification weight. Lastly, a set of study-specific post-stratification weights were constructed to adjust for the study s sample design and survey non- response. The MacroMonitor study- specific weights are based on household level demographic and geographic distributions for the non- institutionalized, civilian population ages 18+ from the Current Population Survey (CPS), March 2010 Supplement. Respondents were weighted to the derived benchmark distributions presented in Table B- 1. Comparable distributions were calculated using all completed cases from the field data. Since study sample sizes are typically too small to accommodate a complete cross- tabulation of all the survey benchmark variables, an iterative proportional fitting is used for the post- stratification weighting adjustment. This procedure adjusts the sample data to the selected benchmark proportions. Through an iterative convergence process, the weighted sample data were optimally fitted to the marginal distributions. After this final post- stratification adjustment, the distribution of the calculated weights were examined to identify and, if necessary, trim outliers at the extreme upper and lower tails of the weight distribution. The post- stratified and trimmed weights were then scaled to the size of the population (116m households). Extremely large weights, though they help the fit of the total sample to the Census marginals, are statistically very unreliable. And because the demographics of persons underrepresented (and overweighted) in the sample B-1

20 are typically the young, low income, and poorly educated, large weights also increase the relative importance of questionnaire responses of low validity. For these reasons, we capped the largest weights by winsorizing the distribution: We replaced the top 2.5% of weights by the mean value of the top 2.5% of weights. After winsorizing, the range of weights was 1.88 to (ratio 90). The weighted winsorized sample has an estimated 40% of the statistical efficiency of the unweighted sample, which means that most weighted calculations have confidence intervals approximately equal to those in an unweighted sample of about 1,750 (0.40 x 4,374) respondents. Finally, we factored weights so that their sum equaled the estimated number in thousands of economic households in the United States. After factoring, the weights ranged from 1.88 to and summed to 128,047 (000). Table B-1 Weighting Targets MACROMONITOR Number of responding households 4,374 Estimated number of household economic units 128,047,000 Household Characteristics Percentage of All U.S. Households Presence of Unrelated Persons Living in the Home Non-family in the home 33.1 Family only in the home 66.9 Census Region New England 4.9 Mid- Atlantic 13.4 East-North Central 15.6 West- North Central 7.0 South Atlantic 19.7 East-South Central 6.1 West-South Central 11.2 Mountain 7.0 Pacific 15.1 Metropolitan Area Non-Metro 16.7 Metro 83.3 Household Income Under $ $ to $ $ to $ $ to $ B-2

21 $ to $ $ to $ $ to $ $ or more 8.3 Home Ownership Status Own 67.2 Rent/other 32.8 Household Size or more 23.7 Presence of Children No children under age Children under age Age of Head of Household 18 to 34 years to 44 years to 54 years to 64 years years or older 21.6 Ethnicity of Head of Household White 70.8 Black or African American 12.1 Hispanic 11.3 Other 4.7 More than one 1.1 Education of Head of Household Grade 0 to Some high school 7.7 High school graduate 29.6 Some college 28.0 Bachelorʼs degree 19.6 Beyond Bachelorʼs degree 10.7 Internet Access No 31.3 Yes 68.7 B-3