Capitalizing on the Crisis

Transcription

1 Capitalizing on the Crisis Insights for Difficult Times Bob Neuhaus, Global Sector Head TNS Finance March 16, 2009

2 Let s talk about What has happened and is happening in the markets How consumers feel about the financial crisis How the financial crisis is affecting consumers personal situation How consumers are changing their financial behavior What consumers expect from their banks.and the opportunities this offers to banks and financial providers 2

3 Downward Spiral Layoffs, Cutbacks, Defaults, Foreclosures Financial Institutions in Trouble Negative Stories in the Press Economic Slow-Down Consumers Cut Back Spending Drop in Consumer Confidence 3

4 Annus Horribilis Fall 07 March 08 Sept 08 Sub-prime mortgage crisis Government bails out Bear Stearns Lehman Brothers collapses Acquisitions of Wachovia, WaMu Government bank bail out plan Government seizes Fannie & Freddie Capital injection(s) AIG Bank of America buys Merrill Lynch Collapsing Stock Markets DOW - BB Finance.yahoo.com

5 How do consumers feel about the financial crisis? 5

6 How has this affected the consumer outlook? Consumers are pessimistic Another 1 to 2 years Another 2 to 3 years More than 3 years 57% 60% 66% 33% 11% 13% USA 57% think financial crisis will last at least another 1-2 years 60% agree there will be a global depression 66% agree there will be a depression in the US Source: TNS Financial Crisis survey 6

7 Not only in the U.S Consumers are pessimistic worldwide Another 1 to 2 years 56% Another 2 to 3 years More than 3 years 49% 59% 57% 72% 66% 72% 60% 74% 66% 81% 66% 30% 25% 34% 33% 14% 13% 15% 11% 12% 11% 10% 13% France Germany UK US France Germany UK US France Germany UK US Majority thinks financial crisis will last at least another 1-2 years At least 6 out of 10 agree there will be a global depression Almost 7 out of 10 foresee a depression in their country Source: TNS Financial Crisis survey 7

8 Consumers expect things to get even worse Consumers expect global and local economies and stock markets to get worse over the next six months Overall global economy 55% 28% 9% 8% Global stock markets 52% 24% 10% 14% Overall economy of the US 52% 27% 9% 12% The Stock market in the US 49% 25% 10% 26% Worse The same Better Don't know Source: TNS Financial Crisis survey 8

9 although they have not translated this completely to their own personal situation but significant groups of consumers expect their own situation to stay the same or get worse over next 6 months Value of your household s investments 43% 32% 9% 17% Your household s overall financial situation 36% 44% 13% 7% Financial health of the organization you work for 30% 38% 8% 25% Your household s income 28% 51% 15% 6% Worse The same Better Don't know Source: TNS Financial Crisis survey 9

10 How does the crisis affect consumers personal situation? 10

11 Consumers are anticipating losing their jobs, homes My job will be at risk I will lose my home 11% 33% 19% 20% 50% 27% 21% 19% Significant groups of consumers expect to lose their jobs and home over next 12 months I will need to borrow more money I will find it difficult to get access to a loan or other credit 24% 54% 27% 20% 40% 18% 9% 9% Besides, consumers will need to borrow more money but expect to have difficulty getting credit Agree Neither Agree Nor Disagree Disagree Don't know Source: TNS Financial Crisis survey 11

12 The future looks less secure I will need to increase my income by working more 57% 21% 13% 8% I will have to postpone my retirement 33% 24% 20% 24% Agree Neither Agree Nor Disagree Disagree Don't know Source: TNS Financial Crisis survey 12

13 especially Boomer generation expects having to postpone retirement % 24% 21% 27% % 28% 17% 29% % 25% 22% 23% % 22% 18% 15% % 19% 22% 29% Agree Neither Agree Nor Disagree Disagree Don't know Source: TNS Financial Crisis survey 13

14 How are consumers changing their financial behavior? 14

15 How are consumers changing their financial behavior? Consumers are resorting to several measures, but in small numbers I am putting all my money in cash 12% I am changing/ planning to change my current bank/savings/ investment providers 8% I am only buying or planning to buy financial products that are recommended as crisis-proof by my bank or financial advisor 7% I am spreading my money between several banks/ savings/investment providers 7% I am buying or planning to buy financial products that are crisis-proof based on my personal assessment 7% I am selling or planning to sell financial products, that do not seem secure 7% Source: TNS Financial Crisis survey 15

16 Consumer confidence in financial institutions challenged Consumers lost a lot of confidence in large banks in 2008, and who can blame them? 16

17 Consumer Trust in Financial sector has taken big hit Oct 08 7% 34% 59% Banking Jan 09 5% 36% 59% Brokerage/ Investm. Oct 08 Jan 09 6% 5% 37% 40% 57% 55% Public Sector/ Govt. Oct 08 Jan 09 6% 14% 42% 44% 52% 42% Insurance Oct 08 Jan 09 6% 4% 56% 60% 39% 36% Advertising Oct 08 Jan 09 5% 4% 65% 68% 30% 28% Automotive Oct 08 Jan 09 6% 5% 45% 65% 50% 29% Increased Remained Stable Decreased Source: TNS Trust survey Indicate how your trust in these sectors/institutions has changed in the last 3 months 17

18 especially large national banks Large National Banks Oct. 08 Jan. 09 7% 5% 35% 37% 58% 58% Brokerage Companies/ Investments Oct. 08 Jan. 09 6% 3% 36% 40% 58% 57% Insurance. Oct. 08 Jan. 09 5% 4% 49% 54% 45% 43% Smaller Regional/ Local Banks Oct. 08 Jan % 13% 58% 62% 25% 25% Credit Unions Oct % 66% 17% Jan % 69% 17% Increased Remained Stable Decreased Source: TNS Trust survey Indicate how your trust in these sectors/institutions has changed in the last 3 months 18

19 What consumers expect from their banks and the opportunities this offers 19

20 Consumers expect their bank to act on all fronts Products that are risk-averse and secure Brands that you can trust and that communicate with you A relationship with my bank, that is close-knit, stable and mutual 20

21 Launch products that fit this situation Consumers expect their bank to: Launch new products suitable for the current situation Launch new products which are low risk but have a reasonable yield Provide solutions to help manage my financial situation in this crisis Source: TNS Financial Crisis survey 46% 43% 57% Consumers are expecting banks to provide products that recognize the market situation. In order to do this successfully, it is critical that banks understand: What does suitable for the current situation mean to consumers? What are the unmet needs that will address consumer anxieties? White space opportunities? Who else is operating in this field? What is the USP? Product and Channels How well will the uptake be for the new product? How risky will the profile be of customers acquiring the new product? 21

22 Rebuild brands returning to core values Banks have moved from to Brand and Communication Historically, consumers have demanded that their banks be competent,,, COMPETENCE A professional, established trustworthy and reliable bank that is efficient and focused on your money. A bank that is smart and provides a safe and secure place for your hard earned money. Easy to do Business With Focus on Life Cares About Me COMPETENCE Innovation Goal Achievement and with relatively few exceptions, banks have lived up to this expectation but now have to rebuild basic core values to restore trust 22

23 Restore trust and communicate, communicate Brand Communication Consumers expect their bank to: Provide me with general information on the current financial crisis and its implications Take action to regain my trust 50% 62% Consumer Distrust requires action in rebuilding brands, restoring trust and continuous communication Rebuild brands returning to core values, to restore consumer trust Communication to provide consumers with information, explain the situation, advise Continuous communication to maintain or restore top of mind position Source: TNS Financial Crisis survey 23

24 Communicate, communicate Brand and Communication Spending is critical to staying top-of-mind and building for future Type of Companies % Change in Sales Total Change All Brands Brands that stopped advertising spending -9.2 Brands that increased media spend Brands that increased multi-channel TV spend Single-source media consumption and purchase data from TNS Consumer Panel collected from July 2001 to June Analysis based on 102 brands across 36 product categories. 24

25 Renew Your Engagement with Customers Customer Relationship Management Consumers expect their bank to: Contact me with specific offers that will improve my current situation Personally discuss my situation with me and look for solutions 33% 53% Consumer Distrust requires unprecedented levels of Proactive Relationship Management Initiate communications with core customers to emphasize your core strengths and your commitment to taking care of them Scrutinize operational processes for all customer touchpoints to provide exceptional service and added-value whenever possible Source: TNS Financial Crisis survey 25

26 ... and reach out to Prospects Customer Relationship Management Acquisition Opportunities Abound Assess and refine your core customer base defend these most valuable customers against acquisition efforts of your competitors Identify Competitive Advantages you have over vulnerable competitors Leverage your brand strength, your strategy, and your communications to demonstrate how your advantage directly benefits available prospects 26

27 Summarizing Three major areas of opportunities Product Understand market needs Identify white space opportunities Develop new products suitable for this situation Invent, innovate, improve Brand & Communication Restore trust Rebuild brand Communicate, communicate Customer Relationship Management Renew engagement with customers... and reach out to prospects 27

28 TNS Finance Global Experts in Finance Research 400 dedicated professionals Located in 50 countries We work for 40 of top 50 financial institutions worldwide Ad-hoc, continuous, syndicated studies in consumer and business to business research Segment focus: Banking, Insurance, Investment, Payments 28

29 TNS Financial Crisis Study 12 major markets worldwide US, UK, Germany, France, Italy, Spain, Portugal, Australia, Argentina, Mexico, Czech Republic, Baltic States General population On-line TNS Financial Crisis Study National coverage December 2008 January 2009 For more information contact Bob Neuhaus Tel. (203)