The Global Economic Crisis: The Impact On European Consumer Attitudes Towards Financial Services

Table of Contents

OVERVIEW

• Catalyst
• Summary

THE FUTURE DECODED

• INTRODUCTION: Understanding how recessionary mindsets influence attitudes towards and actual consumption is vital
  • The recessionary mindset of European consumers has intensified with consumers' widespread belief that they are living in a recession

• TREND: Lower consumer confidence is reflected by a generally negative outlook amongst European consumers
  • Perceptions about the economy, job security and household financial status in Europe have all worsened and there is limited optimism for the six months ahead
  • European consumers' downbeat forecasts appear to be negatively impacting perceptions of quality of life, with stress levels up and personal happiness down
  • Stress levels have risen during the financial downturn, and this should be reflected in the financial services offered

• INSIGHT: Faced with high uncertainty and low optimism for the future, European consumers embrace the status quo
  • European consumers experience increased concerns over their financial products yet remain below the global average
  • ACTION POINT: Financial services providers must meet the anxiety of European consumers for the long term with products and advice geared to alleviate this concern, and target providing support with a personal touch
  • Increased concerns fail to elicit a significant response from European consumers
  • ACTION POINT: Financial services providers have a role to play in reassuring consumers and boosting confidence in their wider financial situation

• TREND: Confidence concerning one' s future personal financial situation influences consumers' financial services decisions
  • Confidence concerning future household financial security impacts short-term savings
  • Long-term savings plans are also impacted upon by household financial confidence

• INSIGHT: There exists a not inconsiderable segment of consumers that have the means and yet are still reluctant to save, both now and in the long run
  • Financial services institutions must encourage these key consumer segments to ask themselves: “Can I afford not to save?”

• INSIGHT: European online banking market reveals untapped potential
  • Europeans check balances online but fail to make the move to some of the other banking activities
  • Heavy online use by price-driven consumers and those who are more optimistic about their household finances
  • ACTION POINT: Online banking interfaces must be improved to provide service and security to rival in-house arrangements

APPENDIX

• Additional data
• Methodology
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Percent likely or unlikely to reduce credit card debt given level of confidence in personal finances
• Table: Percent likely or unlikely to remortgage given level of confidence in personal finances
• Table: Average level of response to “I trust my primary bank” given registered/unregistered online
• Table: Frequency of online banking use by price-driven consumers
• Table: Frequency of online banking use by consumers who expect to be better off financially

FIGURES

• Figure: Datamonitor' s Recession and Recovery portal will allow industry players to continually identify emerging opportunities and track what is happening in the UK economy as it develops
• Figure: More than half of European consumers strongly believe that their country is in a recession, which is indicative of a deeper recessionary mindset.
• Figure: Both Europeans and the rest of the world are revealing heightened economic concerns, but Europeans appear particularly hard-hit.
• Figure: Europeans reveal their financial situation has worsened more than the global average
• Figure: Job security has worsened, with Europeans hit harder than the global average
• Figure: The unemployment rate is expected to peak in 2010 for most European countries
• Figure: Consumer expectations for the next 12 months reveal mixed results
• Figure: Stress levels have increased in consumers' daily lives, with Europeans seeing fewer improvements
• Figure: Levels of concern before downturn reveal Europeans show less concern across the board
• Figure: Level of concerns have increased post-downturn, but Europeans remain less troubled than the global average
• Figure: Some financial services providers have already made marketing promotions focused around rebuilding confidence.
• Figure: European consumers are less likely to undertake all proposed activities over the next six months
• Figure: Consumers likely to save are more likely to be optimistic about their personal finances
• Figure: Consumers likely to invest in their pensions are more likely to be optimistic about their personal finances
• Figure: Four distinct consumer segments have emerged within the savings market
• Figure: Globally consumers regularly check their online bank balance, but Europeans do so with higher frequency
• Figure: Consumer interest in other online banking activities reveals some weaknesses in the online banking sector
• Figure: Consumers highlight branch and security issues as the two main reasons for not using online banking