Primary Financial Institutions MacroMonitor Marketing Report Vol. II, No. 13 October 1996

What does it mean to be a household's primary financial institution? And what opportunities exist to expand the number and types of services provided to the household? Penetration beyond traditional products is more important to the success of a financial institution that ever before. However, consumers have little awareness of nontraditional offerings from institutions. (See the Share of Mind CFD, 1995.) This report profiles consumers who consider different types of financial institutions as primary and considers the products that are typically part of that relationship. These products lay the foundation for the evolution of the relationship between consumers and institutions in the years ahead. Some of the major findings are:
  • The primary financial institution relationship remains focused on basic transactional needs such as checking and savings. Banks and other depositories continue to dominate.
  • In spite of industry convergence, significant differences exist among consumers who consider a bank, an S&L, or a credit union as their primary financial institution.
  • The primary financial institution is affected dramatically by the presence (or absence) of an investment company relationship. This observation is true with respect to demographics and products owned; it is also true for financial attitudes.
  • Different marketing approaches are necessary to expand successfully the products that are part of the primary relationship and to market nontraditional products.

Ratio of Households Owning a Financial Product at Their Primary Depository