Consumer Behavior Monitor: money worries and sustainable banking

With the continued price increases for, among other things, food and energy, concerns about the economy in society are growing.

Recent research from Nibud shows that in addition to people with a low income, people with a middle income are also hit hard. This is also reflected in the figures from Consumer Behavior Monitor, an initiative of Validators and VU Amsterdam.

We are seeing economic concerns rise. The concerns are greatest among the middle-skilled. In addition, figures from the financial sector show that young consumers (18-34 years old) are placing increasing emphasis on the social involvement of financial organizations. This means that financial service providers face a major challenge: How do you appear credible if sustainability is not in your DNA?

Growing concerns about economics, especially among the middle-skilled

Studies from Nibud show that people with a middle income, who previously could do well, now mainly have to keep saving or saving money. Although consumer confidence and desire to buy fell to their lowest level two months ago, we have again spent more money in recent months on experiences that we have had to miss in recent years. We wrote an article about it last month; it seems we are (still) dancing on the volcano while economic worries continue to rise. We know all too well that this is the best time to keep the euro in our wallets.

Where savings were primarily made in a positive way, such as saving for fun things, we now save primarily to build a buffer.

We spend less money now because we do not know what the world will look like in a few months. For example, we see in the figures from the Consumer Behavior Monitor that the proportion of people who put money aside in the form of a savings account, cash in the home or investments / investments increases every month (+ 5% compared to mid-May). ).

Where people felt less secure and healthy physically and mentally in previous months, partly due to the war in Ukraine, these concerns now seem to be easing somewhat. As is often the case, attention to major events decreases quite rapidly over time. But the consequences are certainly still being felt. This month, consumers are more concerned about the availability and affordability of their food (+ 4%), a possible economic crisis (+ 3%) and their own financial situation (+ 3%). Concerns are greatest among the group of middle-educated people, more than two thirds of them (70%, + 12% compared to mid-May) are worried about a possible crisis, and half are worried about their own financial situation (51% , +8% compared to mid-May).

Young people place greater emphasis on the social involvement of brands in the financial sector

Where we in Consumer Behavior Monitor see that price is seen as the main reason for choosing a brand in almost all sectors, it is different in the financial sector. As the only industry, the quality of a brand is more important here than the price. For 43% of Dutch people, the fact that the brand is known for quality is the main reason for choosing a brand when it comes to financial products. The importance of quality is also reflected in the figures for barriers. 37% consider bad experiences with the brand as the main reason for not considering a bank brand for a financial product.

In addition, the importance of social engagement in the financial sector also seems to be increasing, especially among the group of 18-34 year olds. 19% of this group believe that the brand’s social commitment is the most important reason for choosing a brand when buying a financial product.

This percentage is much higher than in May last year (+ 8%). It can be discussed whether brands in financial services should be socially involved. The other age groups find social engagement much less important (11% of the group of 35-54 year olds and 8% of the group of 55+). And that while banks and financial providers occupy an enormously important place in today’s society, which offers many opportunities for change. But it may not be the same for all institutions. The group of over 35-year-olds finds it much more important than the young people that the brand makes them feel comfortable (27-28% of the group of 35+ against 16% of the group 18-34).

Daan Muntinga, Strategy Director at Mensch: ‘Quality is the key, but also something that cannot be distinguished as a financial service provider. The assholes are blocked by AFM; the years of “the bank” are behind us. How do you make a difference? It’s not an option to listen to what people say they want: “If I had asked people what they wanted, they would have said faster horses,” Henry Ford must have said. People do not know what they want, or have difficulty putting it into words. The financial brand of the past, present and future is therefore a brand that does everything it can to better understand its customers and their problems. It knows what people want before they even know it and come up with solutions to it. Not a brand that frantically searches for a social cause because people say they want it. ‘

As a financial service provider, you want to inform your customers as well as possible about the social responsibility you carry with you as an organization. However, this task does not seem so easy. Large banks seem to be stuck in old market positions that do not allow them to tell a credible story. ASN Bank is an example of the area of ​​social responsibility when it comes to sustainability. This bank recently announced a collaboration with partners Natuur & Milieu and IVN Natuurredactie. With the ‘detox program’ for the garden and the balcony, the organizations hope to give biodiversity in the Netherlands a helping hand. Sustainability has been a top priority at ASN since its inception. As the theme becomes increasingly important in society, it is also increasingly higher on the agenda of institutional banks. Although they would like to be involved, they are less likely to move on because it is often not woven into their DNA. If you as a bank want to do something good in the field of sustainability, everything you convey can be used against you. And if one has traditionally been very involved in fossil fuels or industrial agriculture, history quickly becomes difficult.

In other words: there is still a clean task ahead of the financial providers. What does this mean for them now?

As a bank, do you want to make a difference in the field of sustainability, or do you perhaps have to do your part in a different social way? For example, consider the relevant role you can play in your customers’ lives. A great project for marketers to research what works best for the brand and how they can best capture this in brand communication.

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