The Importance of Local Ownership MacroMonitor Marketing Report Vol. II, No. 12 July 1996

Importance that Financial Institution be Local

In spite of the fact that consumers are besieged by marketing for financial services from large national and regional institutions, a majority of consumers believe it is important that their financial institutions be locally owned.
  • Retirees are much more likely to prefer local ownership than are WWII generation and boomers.
  • Lower socioeconomic households and the upper socioeconomic strata lean more toward local ownership. Lower-middle to upper-middle households show less concern.
  • A majority of all households in life stages that come after getting started and (younger) married without children prefer local ownership.
  • Local ownership is more important to people who live in small towns and rural areas than to people who live in suburbs or midsize cities. However, consumers in large cities split evenly in their preference.
At the same time that many institutions are balancing their need to cut costs with the need to expand their revenues, the temptation to eliminate branches and replace them with other means of contact and interaction is tremendous. However, the elimination of a branch may translate into lost customers and opportunities. Some firms have realized that physical presence in a community significantly increases the number of accounts opened by telephone from that area. The same could hold true for mail and online interactions. And, as this report demonstrates, a large number of people still simply prefer in-person contact.