Alpha, the research technology company that brands like Uber, Nestlé and Experian rely on to understand how changing consumer attitudes and behavior influence product innovation, released the newest report in its COVID-19 Research Series.
The new report, available here, provides insight into changing attitudes toward personal finance and banking topics in light of COVID-19. Alpha’s research series was designed to keep businesses and media outlets informed about rapid shifts in consumers’ thinking in response to the coronavirus pandemic.
Alpha asked more than 400 adult Americans, ranging in age from 18-75 years old, a series of questions, including how often they use online banking, how important access to physical cash is to them, how concerned they are about their investment performance, where they’re getting advice related to coronavirus and economic conditions, and more.
Alpha conducted this survey over a two-day period using its rapid consumer feedback platform, which accesses a national panel of U.S. consumers to get feedback on changing attitudes and behaviors.
Alpha’s research reveals that among all the items Americans are hoarding during the COVID crisis, hard cash is less likely to be one of them. While spending has inevitably slowed, most people aren’t depleting their bank accounts and stashing money in their mattresses like they have in past recessions.
Key Findings Include:
- Less Consumers Stashing Cash: Less than half of people (45%) responded that accessing cash right now is important, indicating that a slight majority (55%) trust the online banking system and don’t believe that having cash on hand is critical for most purchases they anticipate having to make. Thirty-six percent (36%) of people claim to be unlikely or very unlikely to even withdraw cash from an ATM machine right now.
- Older Generations More Comfortable Without Cash on Hand: Somewhat surprisingly, the older generations find having cash on hand to be less important than the younger generations. Only 33% of people surveyed who were 55 and older said it’s “extremely important.” The most cash conscious age group was ages 35 – 44; 64% of which said that accessing physical cash was either important or extremely important.
- Retirement Less of a Concern Than Immediate Liquid Investments: While personal finance and other news outlets have been focused on how retirement investments are being negatively impacted by this pandemic, our survey indicates that only 39% of people have a retirement account (401k or IRA). Meanwhile, over two-thirds (67%) of people are concerned or extremely concerned about their liquid financial investments, which are receiving relatively less attention from media, financial institutions and thought leaders.
- Consumers Warm to Online Banking: Sixty-six percent (66%) of people responded that, in normal times, they use online banking at least once per week. There’s a clear divide when you look at the responses by household income, however: 70% of survey participants who make over $100k indicated being much more favorable of online banking in light of the pandemic, compared to 51% who make $50-$100k, 41% who make $25-$50k, and 38% who make under $25k. Overall, 47% of survey participants indicated being much more favorable of online banking than before.
- Online Banking More Appealing Among Those Concerned About COVID-19: Those who expressed more concern about COVID-19 tended to be more in favor of online banking than those who weren’t as concerned. Sixty-three percent (63%) of people who said they were “extremely concerned” about the virus indicated viewing online banking more favorably than they had previously. By comparison, only 13% of those who said they were “not at all concerned” indicated that they viewed online banking more favorably than they did before the virus.”
“These findings have profound implications for how banking and financial institutions can better educate and serve consumers right now,” said Rob Holland, CEO of Alpha. “There has never been a more important time for businesses to understand how changing consumer sentiment can impact their products and services. For instance, it’s important for banks to know that many Americans are embracing online banking for the first time. This presents an opportunity for them to guide consumers on how to do their banking without visiting an actual location. They should also shift the conversation beyond long-term topics like retirement and toward immediate financial concerns like managing debt.”