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Get to Know Mass Affluent Customers’ Digital Banking Habits

By February 16, 2022 June 8th, 2022 CCG Financial Services Marketing Blog

Expert strategies for marketing to the wealthy, digitally oriented consumers of today.

Women looking at phone in public

Article Highlights

  • The mass affluent market controls about one-fourth of America’s wealth.
  • Wealthy millennials prefer to manage banking tasks online, while Gen Zs prefer a mobile app.
  • 37% of affluent consumers use an online investment management platform and about one-third seek financial information online.12
  • 46% of affluent Gen Zs and millennials look to social media when finding new companies to work with.13
  • Affluent consumers generally embrace automation, but want to retain the feel of a personal relationship with their financial institution.

You know about baby boomers, Generation X, millennials and now Generation Z. But what happens when you layer mass affluent consumer attributes and digital banking preferences on top of these segments? You might get some surprises.

We provide a peek behind the curtain to help you win over today’s digitally oriented, mass affluent customers and keep them faithful to your financial institution.

Who is the mass affluent market?

While every financial institution sets its own mass affluent definition, we’re generally talking about households with $100,000 to $1 million in investable assets. It’s a significant group. In fact, even if you narrow the mass affluent definition slightly to $250,000 to $1 million, this segment controls about one-fourth of the country’s wealth, making it the largest group of affluent consumers in America.1

By generation, baby boomers (41%) and Gen Xers (37%) make up most of the mass affluent market, while millennials comprise just 9%.2,3

To zero in on today’s digital focus, we overlayed the mass affluent customer segment with what Accenture dubbed Generation D (for digital, of course). These are 75 million consumers “who are deeply digital, integrating online and social technologies into the fabric of their lives.”4

As a rule, Gen Z — currently aged 11 to 26 — is still too young to fit the investable asset criteria we set for the mass affluent market. (In at least one study, the mass affluent definition for 18- to 24-year-olds was investable assets of $50,000 to $1 million.)5 Nonetheless, they’re the first generation of digital natives, which makes them worth including in this discussion.

Digitally Focused Mass Affluent Customers2,3,4

What makes affluent consumers different — and what does it mean to you?

Like other mass affluent consumers, those who are wealthy and digitally savvy have high expectations for customer service — and that definitely includes online and mobile interactions.

What does that mean in terms of banking? For one thing, pushed by the pandemic, 65% of Americans now use digital banking.6 More than one-third of financial services clients who want an advisor-led relationship expect to use more digital tools in the future, with millennials twice as interested as baby boomers in receiving virtual advice.7

Unfortunately, with the increasing adoption of virtual banking, personalization has taken a hit. Twenty-six percent of Americans feel technology has diminished their personal relationship with their financial institution.7

How do you reconnect? Get customer-centric at every level. Start by leveraging customer data to provide personalized communications, offers and other interactions. And if you’re ready for advanced strategies, why not explore virtual reality?

Mass affluent customers will also expect their digital banking experience to provide convenience and flexibility. That means you need to offer service levels via digital channels that match (or surpass) what you offer in-branch. You need to ensure that your communications are accessible — and provide a top user experience — across all types of digital devices. And you have to offer the digital-based banking features and functions that this group values, from basic online and mobile banking to advanced investment platforms, helpful online tools and advice, multiple payment methods and more.

In the rest of this article, we’ll take a closer look at what mass affluent customers value and offer some examples of how your financial institution can provide it with a smart mass affluent banking strategy.

What devices do mass affluent customers prefer?

Sixty percent of mass affluent consumers own a smartphone,1 including 93% of millennials and 73% of boomers.2 Tablets are also popular, with 42% of wealthy millennials and 38% of wealthy boomers claiming one, versus 33% of the general mobile population.2

Interestingly, wealthy millennials prefer to manage banking tasks online rather than with a mobile device.2 But more than two-thirds of Gen Z prefer to bank using a mobile app.8

  • Mass affluent digital banking strategy: Since most financial institutions target multiple audiences, make sure your services and communications provide a great customer experience across all devices. For example, use responsive or elastic design that automatically adjusts based on screen size. Adapt your content by device and format, too. For instance, an email received on a laptop can provide more images and information than a text message read on a smartphone.

What payment methods do mass affluent customers use?

Just a few years ago, cash was still the king of payment methods. But digital options are taking over. Now, roughly half of millennials (including mass affluent customers) prefer digital payment methods like PayPal, Venmo and Apple Pay.9 You may be surprised that nearly half of baby boomers also say they would favor a digital wallet over a traditional bank app.8

A majority of consumers in all generations expect to continue using contactless payment options even after pandemic conditions abate.10 All generations are also increasing use of person-to-person (P2P), from 13% of boomers to 46% of millennials, and 37% of Gens X and Z reporting higher usage.10 In fact, the number of P2P mobile payment users is expected to reach 41 million by 2025.10

  • Mass affluent digital banking strategy: It remains important for you to provide a way for all customers, including mass affluent customers of every generation, to easily interact with your bank and your staff via any type of device. Your mass affluent banking strategy also needs to prioritize digital wallets, P2P apps and other contactless payment methods, whether your own or through a partnership.

Where do mass affluent consumers get financial information?

Mass affluent customers of all generations want their banks and credit unions to help them learn about financial topics and build financial management skills. For instance, more than two-thirds of millennials would like their banks to provide tools to help them build and monitor a budget.11 And 70% of Gen Xers want help improving their financial planning skills.

Thirty-seven percent of affluent consumers use online investment management platforms.12 In fact, while 28% will consult with an advisor, a whopping 40% conduct their own research and manage their own investments using an online platform.12 About one-third visit informational websites12 to help with that research.

When it comes to getting information on which brands to work with, 46% of affluent Gen Zs or millennials turn to social media — considering not only personal comments and recommendations, but also ads and company social media pages.13

  • Mass affluent digital banking strategy: Make your website a self-serve learning and resource center. Add digital tools such as investment platforms, financial dashboards, interactive budget planners and more. Also offer value-added content that lets customers gain education, build skills and make smarter financial decisions.

Do mass affluent customers prefer traditional banks or challengers?

While mass affluent consumers generally prefer working with traditional financial institutions, alternatives — such as fintechs and digital-only banks — continue to gain popularity.

As you might expect, Gen Z — full of digital natives — is the most comfortable using digital means to move money. One-third of this group doesn’t expect to rely solely on banks for financial services needs in the future. Forty-four percent of them expect to use both traditional banking services and fintech options, with a smaller percentage of millennials (37%) and Gen X (27%) feeling the same.14

  • Mass affluent digital banking strategy: Alternative financial services providers tend to win customers with convenience, personalization and, often, lower costs. You need to offer the same as much as possible. That may mean considering new partnerships with innovative technology providers who would make better allies than competitors, as well as local merchants you can work with to deliver special offers to select consumers.

How do mass affluent consumers feel about automation?

Affluent customers’ banking habits largely embrace automation. Consider that roughly half of digitally focused mass affluent customers prefer that their financial institution automatically and proactively offers suggestions to address their financial needs.²

But personalization matters, too: These customers want that financial information to be based on their own behaviors, lifestyles and financial goals — preferably in real time.

In addition, mass affluent consumers in general want a simple, flexible online tool that allows them to review all their financial accounts in a single place. And they want the ability to see how different scenarios can affect their financial plans.15

Affluent customers’ banking habits are continuing to evolve. Half of this group expect to increase their virtual engagement with financial advisors, although millennials are two times more likely to do so than boomers.7 Even those who prefer an advisor-led (versus self-serve) model expect to use digital tools more.7

  • Mass affluent digital banking strategy: The downside to technology and automation is that affluent customers have a diminished sense of having a personal relationship with their financial team. Don’t forget to include in-person components to your service. And use your data to provide personalized communications. Artificial intelligence tools may also allow you to more easily gather, analyze and act on consumer data to provide uber-personalized solutions and advice.

What else matters to mass affluent customers in banking?

As befits the Me Generation (millennials), the group that raised them (baby boomers) and higher-wealth clients, digitally savvy mass affluents want to be recognized in-branch and online as important customers. (Note: While some millennials have Gen X parents, the majority are the children of baby boomers.)

In fact, 30% of affluent consumers (versus 23% of the general population) feel it’s important to stand out from the crowd.13 They’re also more likely to advocate for a brand that enhances their online reputation or if the company offers them exclusive content or services.13

  • Mass affluent digital banking strategy: To help retain digitally savvy mass affluent customers, shower them with VIP treatment. Consider offering priority service or access to exclusive online resources and content. But make the primary focus truly understanding their needs — and letting them know you do through highly targeted messages, offers, products and services.

Mass affluent consumers still care about the basics.

Even with this tech-savvy, digitally focused audience, core values still matter. A lot. More than 80% of mass affluent baby boomers and millennials find a bank’s reputation very important, whether they’re choosing a financial institution or making product decisions.¹6 Gen X mass affluents, in particular, place great importance on excellent, consistent customer service, regardless of channel.

  • Mass affluent digital banking strategy: While you’re prioritizing and optimizing your digital banking experience, don’t neglect the values that made you a success in the first place. After all, traits like integrity, transparency and personable service can give you a win with every generation.

Is it time to review or refresh your mass affluent customer marketing plan or your financial services digital strategy? CCG’s financial marketing experts can help. Put CCG’s four decades of expertise to work for you. Schedule a free consultation or call 303.986.3000 today.

Sources

1 “Reinventing Wealth Management for Mass Affluent Customers,” Unqork, https://www.unqork.com/resources/finance/reinventing-wealth-management-for-mass-affluent-customers, accessed Jan. 13, 2022

2 “Banking on the Mass Affluent: Millennials with Money,” The Financial Brand, posted Sept. 18, 2017, https://thefinancialbrand.com/67492/banking-mass-affluent-millennials/, accessed Jan. 13, 2022

3 “Gen Xers get no respect!” Mary Ellen Georgas-Tellefsen, ABA Bank Marketing, posted Aug. 18, 2017, https://bankingjournal.aba.com/2017/08/gen-xers-get-no-respect/, accessed Jan. 13, 2022

4 “Targeting and Serving the Mass Affluent Client,” BAI Retail Delivery presentation, posted Nov. 13, 2014, https://silo.tips/download/targeting-and-serving-the-mass-affluent-client-november-13-2014, accessed Jan. 13, 2022

5 “It’s Official: Rich People Are Relying on Their Rich Parents,” Tanza Loudenback, BusinessInsider.com, posted June 7, 2018, https://www.businessinsider.com/merrill-lynch-survey-millennials-gen-z-rely-on-inheritance-2018-6, accessed Jan. 13, 2022

6 “Share of Population Using Digital Banking in the United States from 2018 to 2022,” Statista, https://www.statista.com/statistics/946109/digital-banking-users-usa/, accessed Jan. 12, 2022

7 “Where will wealth take clients next?” EY, https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/wealth-and-asset-management/ey-2021-global-wealth-research-report.pdf, accessed Jan. 12, 2022

8 “Accenture: Gen Z Embraces Mobile Banking and Frequent Branch Visits,” Robert Williams, MobileMarketer.com, posted Oct. 18, 2017, https://www.mobilemarketer.com/news/accenture-gen-z-embraces-mobile-banking-and-frequent-branch-visits/507548/, accessed Jan. 13, 2022

9 “Popular Payment Methods for Millennial Customers,” Jasmine Glasheen, The Paypers, posted Oct. 29, 2019, https://thepaypers.com/expert-opinion/popular-payment-methods-for-millennial-customers–781031, accessed Jan. 13, 2022

10 “How Gen Z Is Embracing Digital Payments,” Victoria Petrock, eMarketer Insider Intelligence, posted Nov. 16, 2021, https://www.emarketer.com/content/how-gen-z-embracing-digital-payments, accessed Jan. 13, 2022

11 “Winning Millennials, Gen X and Boomers in a Digital World,” MX.com, https://www.mx.com/resources/2015/5/7/winning-millennials-gen-x-boomers-in-a-digital-world, accessed Nov. 9, 2018

12 “Bank of America Study Finds Nearly Half of Affluent Americans Getting Their Financial Lives in Order During the Pandemic,” Bank of America, posted April 6, 2021, https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/04/bank-of-america-study-finds-nearly-half-of-affluent-americans-ge.html.html, accessed Jan. 13, 2022

13 “Affluent Consumers: Tapping into the Wealthiest Segment,” Katie Gilsenan, GWI, posted Oct. 26, 2021, https://blog.gwi.com/trends/targeting-affluent-consumers/, accessed Jan. 13, 2022

14 “Gen Z Comes of Age … in the Age of Digital Banking,” Andrew Vahrenkamp, ATM Marketplace, posted June 15, 2018, https://www.atmmarketplace.com/blogs/gen-z-comes-of-age-in-the-age-of-digital-banking/, accessed Jan. 13, 2022

15 “Digitally Engaging the Mass Affluent,” Katie Kuehner-Hebert, BAI, posted Oct. 1, 2014, https://www.bai.org/banking-strategies/article-detail/digitally-engaging-the-mass-affluent/, accessed Jan. 13, 2022

16 “Digital Enablement for Retail Banking,” The Nielsen Company, posted November 2014, https://www.nielsen.com/wp-content/uploads/sites/3/2019/04/digital-enablement-for-retail_banking-november-2014.pdf, accessed Jan. 13, 2022

Greg Sultan

Author Greg Sultan

Greg has more than 30 years of experience working with many of the country’s top 100 financial institutions on activation, acquisition, cross-sell and onboarding campaigns. His expertise also includes developing database marketing programs.

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