A Look into Atypical American Banking

A Look into Atypical

American Banking

A Complimentary Study on:

Superbanked and Unbanked

Consumers

Scarborough measures American life, capturing consumer and media research for the marketing and media industries.

www.scarborough.com info@scarborough.com /ScarboroughResearch

@ScarboroughInfo

Consumer research firm Scarborough provides an analysis on the ten percent of American adults, residing in 12 million households, that are either Superbanked* _{or Unbanked}*_{. This complimentary study on}

these atypical banking patterns examines the essential demographics, local markets, and media consumption patterns of Superbanked and Unbanked Consumers, providing ideas for how to target these consumers, and others like them, who might be in the market for money management help in the next year.

Atypical Banking Complimentary Study

SUPERBANKED Definition– U.S. adults who live in a household that has multiple asset accounts at financial

institutions, as well as some additional investments. Specifically, Superbanked adults have a checking, savings, money market account and certificate of deposits (CDs), and at least one of the following investments: stocks or stock options, bonds, mutual funds, money market funds, second home or real estate property and other securities or investments.

UNBANKED Definition– U.S. adults who live in a household that does not use a bank or credit union.

By identifying the five percent of American adults that are Superbanked, Scarborough uncovers a financially-savvy consumer who financial institutions and banks might target with the knowledge that this consumer is open to the idea of diversifying their financial portfolio. By uncovering the five percent of American adults that are Unbanked, Scarborough provides insights into the ultimate prospective client for banks and financial institutions – the consumer who has no assistance with their money

management.

Vice president of advertiser services for Scarborough, Alisa Joseph, provides commentary throughout this complimentary study giving industry-savvy insights as to the nuances and intricacies of targeting Unbanked and Superbanked Consumers. Revealing trends in banking, as well as discussing challenges facing financial institutions, Alisa’s valuable perspective gives marketers and advertisers a tactical advantage in planning their outreach campaigns.

This study further explores Superbanked and Unbanked Consumers, revealing where they can be reached and explaining marketing strategies that might be most effective when targeting these groups. By understanding the current landscape of atypical banking, financial institutions, marketers and industries that are branching out into financial services can glean what will be important to these consumers this year.

Scarborough defines the different generations as:

Generation Y: Age 18-29 Generation X: Age 30-44 Baby Boomers: Age 45-64 Silent Generation: Age 65+

Scarborough defines an index as: A comparison between the target percentage and the market percentage. Over 100 means the target population percent is higher than the market population percent for a given activity or attribute. Under 100 means the market population percent is higher than the target percent.

55%

have health insurance

24%

have life insurance

23%

use credit cards

31%

more likely than all U.S. adults to look for a job in the next 12 months

9%

plan to go back to school in the next 12 months

93%

use credit cards, index 125

4X

more likely than all U.S. adults to have money market funds (75% have these funds)

2X

more likely than all U.S. adults to have stocks or stock options (64%)

49%

use online banking

44%

use a credit union

Superbanked and Unbanked Consumers

Together Represent 10% of U.S. Adults

More than 11.3 million or

5%

of U.S. adults are Superbanked

More than 12.2 million or

5%

of U.S. adults are Unbanked

“Industries you wouldn’t associate with banking are branching out into the financial services sector,” says Alisa Joseph, vice president of advertiser services for Scarborough. “By identifying these unique prospective clients, industries new to banking can capitalize on consumers traditional financial institutions may overlook.”

25%

Index 143

44%

Index 128

21%

Index 74

10%

Index 50 Generation X Baby Boomers Silent Generation

Older and Educated Superbanked Consumers

Generations, Race/Ethnicity, Marital Status, Education and

Home Ownership of Superbanked Consumers

High School Grad

24%

College Educated

73%

College Grad+

43%

Homeowners

89%

Rent/Other

11%

Highest Level Obtained

Index 128 Index 164

Superbanked Consumers are 64% more likely than all U.S. adults to

have at least a college degree. Generation Y

Superbanked Consumers are 22% more likely than all U.S. adults to be married.

Race/Ethnicity

Superbanked

Non-Hispanic White 84% Black/African American 5% Asian/Other 6% Hispanic 5%

13%

Index 75

Unbanked Consumers Have Young Households

Generations, Race/Ethnicity, Marital and Parental Statuses of Unbanked Consumers

Race/Ethnicity

Unbanked

Non-Hispanic White 38% Black/African American 21% Asian/Other 4% Hispanic 37% 25% 25% 21% Age 5 & Under

Age 6 - 11 Age 12 - 17 Index 115 Index 112 Index 133 Index 137

“Many new or early-assimilation Hispanic Americans have had negative banking experiences in other countries. With the recent diversification of local businesses into banking services, Hispanics who might be distrustful of traditional banks might be more open-minded about banking with a trusted neighborhood business.” – Alisa Joseph

Marketing Tip: Campaigns that explain the

benefits of banking for families with young children will resonate with the Unbanked Consumers as many of them are women and parents.

Children in Household

45% of Unbanked Consumers

Unbanked Consumers are 11% more likely than all U.S. adults to be women and 38% more likely to

be unmarried. Generation X Baby Boomers Silent Generation Generation Y

27%

Index 79

32%

Index 113

28%

Index 141

Atypical Bankers Can Go Against Stereotypes

Annual Household Incomes of Unbanked and Superbanked Consumers

32%

13%

_12%

19%

8%

16%

Less Than $20,000 $20,000 -$24,999 $25,000 -$29,999 $30,000 -$39,999 $40,000 -$49,999 $50,000 or More Index

308 Index 234 Index 175 Index 130 Index 67

Index 30

Unbanked Consumers

28%

18%

19%

_18%

11%

6%

Less Than $50,000 $50,000 -$74,999 $75,000 -$99,999 $100,000 -$149,999 $150,000 -$249,999 $250,000 or More 43% of Superbanked Consumers with an annual HHLD income of under $50K are retired.

“Financial institutions tend to think of Unbanked Consumers as lower income and Superbanked Consumers as affluent. Though there is some truth to these concepts, it is essential for marketers and financial institutions to look beyond the stereotypes in order to reach less frequently accessed audiences on the atypical banking spectrum.” – Alisa Joseph

Marketing Tip:

By understanding household income diversity, you can create targeted messaging that will reach Unbanked Consumers who have a higher household income or Superbanked Consumers who are on a fixed income.

Superbanked Consumers’ Money Management

Credit Card Usage and Popular Financial Services of Superbanked Consumers

11%

23%

29%

30%

48%

68%

Gasoline Discover Any American Express Major Department Store Any MasterCard Any Visa

Type of Credit Card Used

Marketing Tip: Superbanked Consumers have diverse assets that require high-level management. Money managers targeting this group can showcase how they might add value to an already robust financial portfolio.

11%

16%

20%

27%

33%

34%

0% 10% 20% 30% 40% 50%

Real Estate Agent Buy/Rent/Sell Home Online Investing/Stock Trading Stockbroker Second Home/Real Estate Property Accountant Financial Planner 260 Index 234 237 280 256 181

Type of Financial Services and Investments Used

93% of Superbanked Consumers have used a credit card in the past 3

months. They are 25% more likely than all U.S. adults to do so.

Unbanked Consumers’ Alternative Banking

Credit Cards, Financial Services & Money-Saving Methods of Unbanked Consumers

2%

2%

2%

3%

8%

16%

Any American Express Discover Gasoline Major Department Store Any MasterCard Any Visa

Type of Credit Card Used by

Unbanked Consumers

23% of Unbanked Consumers have used

a credit card in the past 3 months.

“Unbanked Consumers are reticent of banking in general, but this is why alternative financial services might target this

consumer group. Unbanked Consumers might not be open to traditional banking methods, but we can see that they still have financial needs and participate in money management systems.” – Alisa Joseph

6%

8%

9%

9%

12%

17%

29%

29%

0% 10% 20% 30% 40% 50%

Email

Magazines

Preferred Customer

Card/Loyalty Card

Product Packages

In-Store Circulars

Mail

Newspapers

In-Store Coupons

Coupon Usage by Unbanked Consumers

7% of Unbanked Consumers used a check cashing service in the past 12 months and those with wireless/cell phones are more than twice as likely as all U.S. cell phone owners to

“By gaining the loyalty of the Superbanked Consumer, businesses can build a relationship with a clientele they can count on to have the financial flexibility to shop most consistently.” – Alisa Joseph

Personal Items Bought

(past 12 months) Superbanked

Avg. Amt Cosmetics/Perfumes/Skin Care 51% $163 Women's Casual Clothing 48% $250 Men's Casual Clothing 45% $220

Athletic Shoes 44% $161

Women's Shoes 39% $191

Household Items Bought

(past 12 months) Superbanked

Avg. Amt Hardware/Building/Paint/Lawn/Garden 86% $583 Television 31% $968 Furniture 26% $1,317 Camera or Accessories 24% $409 Draperies/Blinds/Other Window Treatments 21% $625 Superbanked

Household Items Has

High-Definition Television (HDTV) _91%

Digital Camera 78%

DVD Player (excluding Blu-ray) _77%

Personal Items

Purchased and Amount Spent

Purchased and Amount Spent

Household Items

Household Items Owned

How They Spend – as Important as How They Save

Marketing Tip: Unbanked Consumers may have lower annual household incomes than many other Americans, but they do still have money to spend. Businesses should take the time to reach this often overlooked consumer group.

Unbanked

Household Items Has

High-Definition Television (HDTV) _44%

DVD Player (excluding Blu-ray) _35%

Digital Video Recorder (TiVo, etc.) _26%

Satellite TV Subscription 26%

Household Items Bought

(past 12 months) Unbanked

Avg. Amt Hardware/Building/Paint/Lawn/Garden 28% $385 Television 22% $645 Furniture 12% $838 Mattress 11% $596 Draperies/Blinds/

Other Window Treatments 10% $250

Personal Items Bought

(past 12 months) Unbanked

Avg. Amt Cosmetics/Perfumes/Skin Care 28% $111

Children's Clothing 27% $170

Women's Shoes 26% $122

Women's Casual Clothing 25% $156

Athletic Shoes 24% $139

Personal Items Purchased and Amount Spent Household Items Purchased and Amount Spent

Household Items Owned

Unbanked Consumers Still Spending Money

Shopping Patterns, Amounts Spent and Plans to Purchase for Unbanked Consumers

“Unbanked Consumers may not have the same amount of money to spend as Superbanked Consumers, but they still have consumer needs like all other Americans. They don’t spend as much, but they represent a significant revenue opportunity.” – Alisa Joseph

Superbanked Consumers’ Online Banking

Internet Usage and Online Behaviors of Superbanked Consumers

83%

Superbanked

Access the Internet Monthly

% of Superbanked Adults 7% 11% 15% 20% 32% Less Than $100 $100 - $249 $250 - $499 $500 - $999 $1,000 or More

Amount Spent Annually Online

* Index 111 Index 155

53%

56%

65%

67%

74%

Pay Bills Social Networking Maps/GPS Weather Search

Ways Used Internet Past 30 Days

*

“There has been a big push toward online banking from financial institutions in recent years. Affluent consumers have typically been the targets of this outreach as they present a unique opportunity for banks to manage multiple assets and review complex portfolios in one place.” – Alisa Joseph

Online Banking

49%

157

Online Bill Pay

48%

159

Index

Unbanked Consumers Use Social Media

Internet Usage and Social Media Patterns of Unbanked Consumers

44%

Unbanked

Access the Internet Monthly

% of Unbanked Adults 14% 10% 7% 7% 5% Less Than $100 $100 - $249 $250 - $499 $500 - $999 $1,000 or More

Amount Spent Annually Online

*

30%

40%

45%

48%

70%

Maps/GPS Music Weather Search Social Networking

Ways Used Internet Past 30 Days

* “Though they have no banking affiliation, Unbanked Consumers have a distinct online behavior pattern. These are consumers that can be reached very effectively online because we are aware of their social media habits. They may not be immediate candidates for online banking, but once you reach them, you already know how they like to spend time online.” – Alisa Joseph

Unbanked Consumers are 12% more likely than all U.S. online adults to engage in social

networking in the past 30 days.

50%

54%

71%

Comedies Movies Local News

Type of TV Programs Typically Watch

23%

31%

31%

Country Adult Contemporary News/Talk/Information

Top Radio Formats

51% 52% 52% 53% 53% 53% 54% 55% 72% 78% Business/Finance Advertising Circulars/Inserts/Flyers Food/Cooking Editorial/Opinion Sports Comics International/National Entertainment/Lifestyle Local Main News/Front Page

Marketing Tip: By understanding the media consumed by Superbanked Consumers, marketers can more strategically plan their cross-platform targeted outreach.

Get the Media Scoop on Superbanked Consumers

TV, Radio and Newspaper Media Consumption by Superbanked Consumers

87% of Superbanked Consumers listened

to radio in the past week.

Percentage of Superbanked Consumers Who Read

a Print Newspaper in the Past 7 Days by Section

Target Unbanked Consumers

TV, Radio and Newspaper Media Consumption by Unbanked Consumers

41%

57%

65%

Comedies

Movies

Local News

1 4

Type of TV Programs Typically Watched

18%

18%

23%

Rhythmic Contemporary Hits Adult Contemporary Pop Contemporary Hits

Top Radio Formats

32% 39% 38% 34% 43% 41% 40% 41% 60% 62% Business/Finance Advertising Circulars/Inserts/Flyers Food/Cooking Editorial/Opinion Sports Comics International/National Entertainment/Lifestyle Local Main News/Front Page

Percentage of Unbanked Consumers Who Read a

Print Newspaper in the Past 7 Days by Section

Marketing Tip: Advertise on networks, stations and in sections that have a higher concentration of Unbanked

Consumers to ensure your messaging will be seen, heard and read by your desired audience.

Unbanked Consumers are 94% more likely

than all U.S. adults to watch music videos. 82% of Unbanked Consumers listened to the radio in the past week.

Atypical Bankers Visit Media Websites

Digital Media Consumption of Superbanked and Unbanked Consumers

Of Online Superbanked Consumers in the past 30 days:

o

24% visited a radio website

o

40% visited a broadcast TV website

o

41% visited a newspaper website

Of Online Unbanked Consumers in the past 30 days:

o

23% visited a radio website

o

40% visited a broadcast TV website

o

23% visited a newspaper website

Marketing Tip: In terms of digital media, online Unbanked and Superbanked Consumers do not differ greatly from one another. Marketers may want to use these digital spaces to create campaigns that will appeal to both sides of the atypical banking spectrum.

Reaching Atypical Bankers on the Road

Out-of-Home Transportation for Superbanked and Unbanked Consumers

Miles Traveled Past 4 Weeks Adults Total Superbanked Unbanked

% % Index % Index 199 Miles or Less 37% 28% 75 67% 179 200 - 499 Miles 29% 31% 107 21% 71 500 or More Miles 34% 41% 121 13% 38 Superbanked Consumer are 21% more likely than all U.S. adults to travel

500 miles or more per week.

“Regardless of their banking style, most people have a life that involves spending time outside of their home. For example, shopping centers are entrenched in digital signage as it reaches consumers where they spend time. With financial services so connected to the retail industry, it is important that consumers see messaging where they are

spending money.” – Alisa Joseph

Time Spent Commuting to Work

Past 7 Days Adults Total _{Superbanked Unbanked}

% % Index % Index

Less Than 30 Minutes 40% 37% 94 29% 74

30 - 59 Minutes 12% 13% 107 7% 57

One Hour or More 4% 4% 105 4% 108

Do Not Usually Commute 4% 5% 124 3% 68

Not Employed 40% 41% 101 57% 141 75% of Superbanked Consumers and 41% of Unbanked Consumers shopped at any mall in the past

Targeting Atypical Bankers in their Markets

Top Local Markets for Superbanked and Unbanked Consumers

Superbanked Top Markets

Unbanked Top Markets

Fort Myers, FL adults are 53% more likely than all U.S. adults to be Superbanked. 7% Fort Myers, FL 153 7% San Francisco, CA 149 7% Orlando, FL 149 7% Philadelphia, PA 145 7% Green Bay, WI 141 7% Harrisburg, PA 138 6% New York, NY 135 6% Boston, MA 135 6% Washington, DC 133 6% Hartford, CT 131 17% Harlingen, TX 337 17% Fresno, CA 326 11% Memphis, TN 213 10% El Paso, TX 196 10% Bakersfield, CA 194 9% Los Angeles, CA 171 8% Chattanooga, TN 162 8% San Antonio, TX 159 8% Houston, TX 149 8% New Orleans, LA 148 % of

Market _Index % of Market Index

“The banking industry understands the necessity of local outreach and that individual local markets have nuances. Even though they might be offering a national service, retail banks have a unique local footprint.” – Alisa Joseph

El Paso, TX adults are 96% more likely than all U.S. adults to be Unbanked.

Atypical Banking Study Summary

Using the insights within this banking study, as well as the rest of Scarborough’s banking data, companies and brands can more efficiently target the five percent of American adults who live in a household that is Superbanked and the five percent of American adults who live in a household that does not currently participate in any banking. In addition to the details within this study, Scarborough’s measurements consist of further banking insights

including: trends in bank services, credit card use, investments and much more. Understanding Superbanked and Unbanked households enables financial services companies to play an essential role in the planning and

management of two opposing but important consumer groups.

Unbanked Consumers

• 45% have children under the age of 17 living in their household.

• Harlingen, TX residents are three times as likely as all U.S. adults to be Unbanked.

• 7% of Unbanked Consumers used a check cashing service in the past 12 months and they are more than twice as likely as all U.S adults to use a prepaid wireless/cell phone plan.

• May have lower incomes, but they still spend on consumer goods.

Superbanked Consumers

• 43% of Superbanked consumers with an annual household income of $50K or less are retired.

• Fort Myers, FL residents are 53% more likely than all U.S. adults to be Superbanked.

• 93% of Superbanked Consumers have used a credit card in the past 3 months. They are 25% more likely than all U.S adults to do so.

• Not all Superbanked Consumers have high annual household incomes. Diversify messaging to include these lower income groups.

About This Report and Scarborough

About Scarborough Methodologies

Scarborough employs a two-phase methodology to collect consumer information: a telephone interview (which measures newspaper, radio, and local media website usage and demographics) followed by a mailed, self-administered consumer booklet and seven-day television diary. Scarborough is in-field collecting data 44 weeks of the calendar year to even-out any marketplace disruptions or

seasonality issues. Data is released to Scarborough clients twice per year. Scarborough’s annual sample size is 210,000 adults nationally.

About Scarborough

Scarborough (info@scarborough.com) measures American life. Our consumer insights reflect shopping patterns, media usage across platforms and lifestyle trends for adults. Media professionals and marketers use Scarborough insights to make smarter marketing/business decisions on things like ad placement, multicultural targeting, and sponsorship opportunities. The company's core syndicated consumer insight studies in 77 Top‐Tier Markets, its Multi‐Market Study and its national USA+ Study are Media Rating Council (MRC) accredited. Other products and services include Scarborough Mid‐Tier Local Market Studies, Hispanic Studies and Custom Research Solutions. Scarborough measures 2,000 consumer categories and serves a broad client base that includes marketers, advertising agencies, print and electronic media (broadcast and cable television, radio stations), sports teams and leagues and out‐of‐home media companies. Surveying more than 210,000 adults annually, Scarborough is a joint venture between Arbitron Inc. and The Nielsen Company.

About Alisa Joseph

Alisa Joseph is the vice president of advertiser services for Scarborough. Alisa is responsible for building from the ground up our first sales team and associated strategy focused on the advertiser. Alisa leads a 20+ member sales team in providing advertisers with strategic marketing and advertising solutions via syndicated and custom market research. Alisa spearheads advertiser product development and initiates and coordinates strategic partnerships with other major data providers to enhance advertiser product offerings. Alisa was the recipient of the CEO Award in 2001 for founding the AMS Division.

Contact

Members of the Press: Haley Dercher, hdercher@scarborough.com, 646-654-8426 All others: Brad Sherer, brad.sherer@scarborough.com, 480-659-7395