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The Financial Services Consumer Megatrend Framework

Introducing the Financial Services consumer megatrends framework
A Megatrend framework is a vital tool for analyzing and structuring consumer attitudes and behaviors
A trend framework is used for generating and selecting ideas
A framework provides a structure for idea generation
A framework allows the user to pick the winning ideas
The importance that a consumer places on factors such as community, traditional values, convenience, simplicity and culture impacts buying behaviors
A Megatrend framework is vital for financial services
Customer retention as well as customer acquisition must be considered
There are inherent obstacles in financial services that limit innovation in customer targeting
Price and performance have historically been relied upon as the primary means of targeting customers
Greater customer understanding can help overcome the obstacles found with targeting and communicating to customers

The framework is defined by a series of consumer Behaviors and Complexities
The Megatrend framework has a hierarchy of trends and sub-trends
The Megatrends hierarchy has no ranking at the global industry level
The Megatrend framework is applicable to all consumers across the globe
The six behavior trends identify the benefits that consumers wish to gain from a product or service
The four complexities are areas within which traditional assumptions or measures of behavior can no longer be applied
Trends are distinctly different from fads
Because counter-trends exist it does not invalidate the trend

Ten Megatrends that impact the actions and attitudes of Financial Services customers have been defined

Authenticity
Comfort
Connectivity
Convenience
Individualism
Wellbeing
Demographic Complexity
Financial Intelligence Complexity
Lifestage Complexity
Wealth Complexity
Megatrends in action

Macroeconomic and shareholder pressures present financial services companies with challenging conditions

Consumer empowerment means providers must work harder then ever to attract and retain customers
Competing on price alone is a vicious circle, so players must look past price
Targeting the Authenticity Megatrend
What is the Authenticity Megatrend?
The Authenticity trend in Financial Services
Presenting an authentic, honest and human image is vital
Financial Services companies highlight their heritage and traditional credentials
view of Authenticity in action

Targeting the Comfort Megatrend

What is the Comfort Megatrend?
The Comfort Megatrend in Financial Services
Customers want to feel protected by their financial services provider
Consumers' desire for "Cocooning" and feeling safe and soothed by one's home
view of Comfort in action
Financial services institutions can learn from retailers how to target the simplification trend
Insurers have forgotten their raison d'¨ºtre
Restoring trust is paramount for the global industry

Targeting the Connectivity Megatrend

What is the Connectivity Megatrend?
The Connectivity trend in Financial Services
Ethical consumerism is impacting all parts of the decision-making process
Positional consumption gives consumers a feeling of "belonging"
view of Connectivity in action
Many companies already target the Connectivity trend
The key opportunities are now found in bringing trend efforts into the 21st century
Tapping into new communities provides a wealth of opportunities
Differentiation for the mass market will reap rewards

Targeting the Convenience Megatrend

What is the Convenience Megatrend?
The Convenience Megatrend in Financial Services
Time scarcity is having a huge impact on consumers, encouraging multitasking on-the-go
Consumers are seeking ways to outsource effort
view of Convenience in action

Targeting the Individualism Megatrend

What is the Individualism Megatrend?
The Individualism Megatrend in Financial Services
Consumers are looking for ways to customize and personalize goods and services
Focus on the 'self'
view of Individualism in Action

Targeting the Wellbeing Megatrend

What is the Wellbeing Megatrend?
The Wellbeing Megatrend in Financial Services
Consumers are seeking services that help them build healthy lifestyles
Some financial services providers are encouraging customers to "self-medicate" and "self-prescribe"
view of Wellbeing in action

Targeting the Demographic Complexity Megatrend

What is the Demographic Complexity Megatrend?
The Demographic Complexity Megatrend in Financial Services
Consumers are displaying new attitudes to family responsibilities
Attitudes to women and their role in society have shifted dramatically
view of Demographic Complexity in action

Targeting the Financial Intelligence Complexity Megatrend

What is the Financial Intelligence Megatrend?
The Financial Intelligence Complexity Megatrend within Financial Services
Consumers have a tendency to pass the buck and get into debt through ignorance
Consumers are apathetic about their finances
view of the Financial Intelligence Complexity Megatrend in action
There are a number of quick ways to succeed in the Financial Intelligence Complexity Megatrend
Providers should help consumers face the fear and make finance fun

Targeting the Lifestage Complexity Megatrend

What is the Lifestage complexity Megatrend?
The Lifestage Complexity Megatrend in Financial Services
Marriage and families no longer follow a conventional pattern
Financial services institutions can be more than just banks or insurers
view of the Lifestage Complexity in action

Targeting the Wealth Complexity Megatrend

What is the Wealth Complexity Megatrend?
The Wealth Complexity Megatrend in Financial Services
Both inconspicuous and conspicuous consumption are becoming more of a consideration for consumers
Increased physical and financial mobility means wealth is not as much of a defining feature as it once was
view of Wealth Complexity in action

APPENDIX

Definitions
The Ten Financial Services Consumer Megatrends
Authenticity
Comfort
Connectivity
Convenience
Individualism
Wellbeing
Demographic Complexity
Financial Intelligence Complexity
Lifestage Complexity
Wealth Complexity
Further reading
Ask the analyst
consulting
Disclaimer

List of Figures

Figure 1: A financial services company can pitch its level of customer understanding at various stages depending on the company's sophistication
Figure 2: The Megatrend Framework has a hierarchy of trends and sub-trends
Figure 3: There are 10 Financial Services Consumer Megatrends, shown here in alphabetical order
Figure 4: First Direct uses a number of tools to promote its Authenticity message
Figure 5: Britain's Coutts subtly emphasizes its Authenticity, heritage and tradition
Figure 6: South Africa's ABSA taps into the Comfort Megatrend via its Look4me and Look4help services
Figure 7: AXA France has home insurance that offers complete care, targeting the cocooning trend
Figure 8: Saudi Arabia's Samba ensures Connectivity with a dedicated Islamic product suite
Figure 9: Australia's Bendigo Bank showcases its environmentally friendly credentials to target the Connectivity Megatrend
Figure 10: China's Bank of Beijing's Butterfly Club offering creates exclusivity and female Connectivity
Figure 11: UK direct bank Egg offers a convenient one-stop-shop money management solution
Figure 12: UAE's Mashreq Bank is explicitly targeting the Convenience Megatrend
Figure 13: UK aggregator moneysupermarket.com explicitly aims at a number of trends in the Convenience Megatrend
Figure 14: Spain's La Caixa offers personalization through a wide range of card design choices
Figure 15: Citigroup in the Czech Republic proposes a cycle of account management that targets the Individualism trend of self-reliance
Figure 16: Wellbeing's healthy nesting trend is brought up to date with Cr¨¦dit Mutuel's insurance offering
Figure 17: Lincoln Financial helps consumers to help themselves with its Futureself idea
Figure 18: US insurer Nationwide cleverly targets the Demographic Complexity Megatrend with humor
Figure 19: Russia's Alpha Bank's Cosmopolitan card taps into gender stereotypes
Figure 20: International heavyweight Allianz uses its 'Women Money and Power Study' to demonstrate Demographic Complexity
Figure 21: First Direct embraces modern technology to help clients access information about financial products, thereby targeting increased consumer Financial Intelligence
Figure 22: US insurer Nationwide targets younger people's fear of pensions to help improve their Financial Intelligence
Figure 23: Austria's Erste Bank demonstrates Lifestage Complexity targeting through dedicated pages and packages for families, young adults, the over 40s and the over 60s
Figure 24: France's BNP Paribas has specific offerings for clients going through a divorce or separation, thus catering to the Lifestage Complexity Megatrend
Figure 25: American Express offers prestige and conspicuous consumption to meet the Wealth Complexity Megatrend
Figure 26: Australia's ANZ has a specific offering that caters to the Wealth Complexity trend of increased financial and physical mobility