First
Ever Consumer Service Fee Study Shows High Desire for and Willingness
to Pay More to Banks and Credit Unions for Convenience Services That
Deliver Concrete Value.
SAN
ANSELMO, Calif. (May 22, 2012) -- The results of the first
Integrated Study on Service Fees designed to gauge consumer
acceptance of fee-based services from banks and credit unions reveal
that consumers are willing to pay more for “lifestyle financial
services.” Market Rates Insight, Inc. (MRI,
http://www.marketratesinsight.com),
a leader in pricing intelligence for deposits, personal loans,
mortgages, and fees, conducted this nationwide consumer study to give
banks and credit unions empirical data to help them reduce the risks
associated with consumer backlash from service fees, and identify new
sources of revenue from value-based services that consumers want.
The
study is expected to prove valuable for banks and credit unions,
giving them insight to compete effectively with larger institutions
offering lifestyle financial services. Those new services have a
higher perceived value and promote greater consumer loyalty such as
credit score monitoring, identity theft alerts, mobile banking
services, personalized couponing services, person-to-person payments,
and other services. The study includes an in-depth analysis of
consumer preferences and perceived value for such services, as well
as a competitive overview of these same services from the top five
U.S. banks. The findings are based on a national sample of 1,500
consumers and are broken down by demographic data such as age,
gender, income, and other criteria.
Consumers
indicated they are willing to pay on average $3.63 for lifestyle
financial services that deliver convenience and efficiency, and
credit union members indicated a higher likelihood to use such
services (68.7%) than bank customers (66.3%). Foremost among the
services that consumers indicated they would seek from financial
institution is Identity Theft Alerts. More than 82 percent of those
surveyed indicated they would be likely to buy Identity Theft Alert
services from their bank or credit union at an average monthly fee of
$4.07. Ranking second was Credit Score Reporting, with more than 73
percent indicating they were likely to buy this service at an average
fee of $3.39 per month.
“Financial
institutions continue to see revenue from fees for traditional
banking services shrinking. In fact, income from service fees on
deposit accounts declined 13 percent between 2007 and 2012,” said
Dr. Dan Geller, Executive Vice President of Market Rates Insight and
the architect of the study. “With continued low interest rates,
banks and credit unions need to develop new revenue models based on
fees consumers are willing to pay for. Our new study reveals the
importance of this new class of lifestyle financial services; those
services that consumers want, and that will soon uses as a criteria
to determine whom they will trust with their money.”
Traditionally,
financial institutions have based their decisions about setting
service fees on the competitive landscape for similar services.
However, consumers have demonstrated they are no longer interested in
paying fees for services that have no perceived value. The new
Integrated Study on Service Fees points toward a new approach by
assessing consumers’ preferences on price sensitivity with the
competitive landscape reveal what consumers want, what they are
willing to pay, and where the market opportunities lie. The
first-of-its-kind consumer survey helps financial executives reduce
risk from making poor fee decisions, and increases the probability of
generating incremental income from new services.
The
Integrated Study on Service Fees is available as a comprehensive
report assessing all seven lifestyle financial services. Individual
reports also are available for credit score services, identify theft
protection, personalized couponing, prepaid reloadable cards,
overdraft protection, personal money transfer, and mobile remote
deposit capture. Each study features consumer research on preferences
and perceived value, as well as demographic segmentation.
For
more information, contact Market Rates Insight at
info@marketratesinsight.com.
About
Market Rates Insight
For
more than two decades, Market Rates Insight (MRI) has been helping
clients price with precision by providing banks, thrifts, credit
unions, and other financial institutions with comprehensive market
intelligence on deposits, loans, and fees. MRI uses deposit surveys,
mortgage and consumer loan surveys, fees and features studies, new
product alerts, benchmarking and market share analysis to give
subscribers the intelligence needed to strategically position
products, optimize pricing and react to emerging trends. MRI’s
products include web-enabled, customizable report programming,
proprietary product research tools, searchable databases, market
alerts, and online dashboards that aggregate key client data to
provide real-time interactive views on how they rank against their
specific competitors.
Market
Rates Insight is located in San Anselmo, California. For more
information, see http://www.marketratesinsight.com.
Photos
available upon request
For
additional information contact:
Tom
Woolf
Market
Rates Insight
(415)
259-5638
