Megatrends and Financial Services MacroMonitor Marketing Report Vol. V, No. 14 January 2003

Capturing business opportunities requires exploring the big picture and then focusing on actionable strategies. As we thankfully close 2002 and optimistically usher in the new year, this issue of the MacroMonitor paints with a broad brush social and technology trends that will shape the nature and business of consumer financial services in the next decade. Drawing on the resources of the various programs of SRI Consulting Business Intelligence (now Strategic Business Insights), we define several forces of change that should be (if they are not already) on financial institutions' radar screen.
  • Aging Boomers versus Echo Boomers. Marketing to divided generations will be a challenge for financial institutions because the large market of Boomers will be moving into retirement just as another large population bulge, the Echo Boomers, begins buying its first cars, first houses, first mutual funds, and first stocks. Management of retirement assets and the need for credit and insurance products will undergo changes as aging Boomers redefine the retirement life stage. Meanwhile, Echo Boomers' different generational experience will mean a reassessment of financial institutions' delivery and marketing strategies.
  • The time-based economy. Financial institutions must contend with time-starved consumers. Successful products and services will either save customers' time and attention or supplant some other attention-monopolizing activity. Financial companies will gain competitive advantage and achieve brand differentiation by addressing time-based—economy issues such as information overload, mobility, and complex financial processes and relationships.
  • A cashless, checkless society. Asking consumers to forgo cash and checks is asking too much too soon. But eventually, most consumers will adapt as more businesses reward early adopters and penalize the laggards. The complex array of electronic payments systems will push financial institutions to find ways of anchoring customers through better pricing, greater choice, and strong alliances and partnerships with e-commerce businesses. In the meantime, instead of having the anticipated cost savings, financial institutions face increasing costs and redundancy as they try to maintain all payment platforms: cash, checks, and various e-payment technologies.
  • Technology thresholds. Advances in wireless technologies and speech recognition and other computer-user interfaces make the availability of financial services anytime, anywhere, and by any means closer to reality. Much work remains in integrating information networks and automating and accessing basic information and transaction processes. Implementation will not be easy, but it is, in many cases, inevitable.