Accountancy, asked by mujtabaali6267, 1 year ago

Importance of high income group in banking

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Answered by Daknam
4
In Raddon’s research, roughly four out of 10 respondents say their primary financial institution is a major bank. But high-income consumers are 1.5x more likely to say they use a megabank as their PFI. Similarly, Joe and Jane Average are almost twice as likely as high-income consumers to indicate their primary institution is a community bank or credit union.

Almost two-thirds (63%) of participants in Raddon’s study said their primary financial institution was a major bank — BofA, JP Morgan Chase, Wells Fargo, Citibank, PNC or U.S. Bank.

High-income Millennials in the study exhibited a far higher than average propensity to use a major bank as their primary financial institution. Of the respondents, 85% of high-income Millennials reported using a major bank as their primary financial institution.

“Younger generations generally favor more flexibility and technology within their banking, so it’s no surprise they may be attracted to major banks that can provide them with the features or functionality they crave,” Raddon says in its report.

However, high-income consumers generally desire a financial institution they can trust — where they can grow their wealth and their financial knowledge, and where they feel they are known and belong. This poses a potential advantage for smaller community-based institutions banks who are better positioned to cultivate lasting relationships with this lucrative consumer segment.

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