First Peek at the 1998 Data MacroMonitor Marketing Report Vol. IV, No. 1 January 1999

The changes in the U.S. economy and the financial services landscape are accelerating. Fifteen years from now it will be relatively simple to look back and see which changes were important. The challenge is to determine which ones indicate future direction and which are merely passing fads. And how can institutions benefit from consumers' changes? This report, from the 1998-99 MacroMonitor, confirms the recent developments among U.S. consumers and provides some thought-provoking insight into where we are heading.
  • Investments. Household penetration of stock and stock mutual funds, now at 33 percent, continues to grow. We may be witnessing the creation of a mass market of wealth.
  • Retirement. More than half of all households have retirement products, excluding pensions. And in spite of the Roth IRA, it is 401k/403b/457 plans that are driving growth here.
  • Transactions. Computer ownership, debit-card use, and Platinum-card use are all growing and capturing more transactions. The only channel declining significantly is cash.

Use of Home-Based Financial Services

  • Home banking and investing. Although the growth in home-based financial services, particularly for investing, is rapid, use has saturated the early adopters and, even with growing electronic commerce, potential users are plateauing.
  • Credit products. Increasing personal bankruptcies, credit-card churning, and the locking in of low fixed rates all suggest that consumers have become quite adept at leveraging credit.
  • Life insurance. The continuing decline in life insurance defines an industry that is challenged to redefine its basic products value to the general population.
  • Information and advice. Consumers still want professional financial help, and institutions continue to struggle to find an effective and profitable way to deliver it.