What are Your Customers Money Mindsets

What are Your Customers Money Mindsets

What Are Your Customers' Money Mindsets?

Luca Gagliardi

Luca Gagliardi

Based in New York, Luca Gagliardi is Payments Research Lead at Accenture, where he has worked for the past 11 years in New York, London and Milan.

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I am in my mid-30s, proud to technically call myself a millennial (albeit on the older side), with a degree who works as a professional in a consulting firm. My wife is in her early 30s, squarely in the millennial camp, having graduated and is working as a professional in a bank.

I have a credit card stored in Apple Pay. I use Amazon Dash. And I have Betterment, Digit, Circle and Moven accounts.

She only uses her bank's debit card, she checks her finances every day through mobile banking, and she likes receiving alerts on her latest transactions. (Also, when I try to pay with Apple Pay in the store, she always reminds me that using a bank card is quicker, and always works without creating a longer line.

Money mindsets, unbundled

The way my wife and I see money is clearly different. I am a digital devotee who likes seeing myself as an early adopter of new technologies and is comfortable in sharing personal details with third parties. She likes receiving advice to mitigate risks and prefers a frictionless customer experience.

The bank we share, however, sees us as one and the same. It sends us the same offers, including one for car insurance, even though we don’t own a car. It likely categorizes us based on age, income, marital status or ZIP code – relying on traditional customer segmentation to target us.

This is business as usual and does not provide deep customer insight. In fact, it lacks basic human insight, which is essential to bringing true value to consumers. It also overlooks the deep emotional currency of money, which reflects how people live and how they see themselves.

To address this, Accenture and Fjord developed an alternate framework called Money Mindsets segmentation. It is rooted in both qualitative and quantitative methods, and is rich with observational research that yielded insights into how consumers behave and operate naturally within a financial context. Using statistically driven data modeling, it drew this insight from 4,000 consumers in North America.

According to this research, there are four money mindsets:

The Four Money Mindsets of Consumers

Achievers (26 percent of consumers) – These consumers feel empowered and optimistic about their future goals and prioritize the longer term over day-to-day expenses. Achievers believe that making wise financial decisions now allows them to save and work for something in the future. They prefer more structure for keeping track of where money goes, but feel comfortable as long as they're sticking to the spirit of their budget. They tend to be older and wealthier—33 percent are mass affluent consumers with incomes of more than $100,000 annually. And having more money means that Achievers often have more complex financial needs (42 percent are multi-banked) and greater financial sophistication. They are heavy users of credit cards — 72 percent have more than one card and are attracted to credit for the rewards they get. This group tends to include digital fast followers.

Balancers (37 percent of consumers) – These consumers place great value on order and consistency. Uncertainty and unexpected expenses throw them off. They track their finances — frequently and meticulously — using various tools and resources, but only nine percent consider themselves to be early adopters of new technologies. A majority (79 percent) have never paid in store with their smartphones. Balancers are the least comfortable sharing online bank account credentials with third parties. Digital education and risk mitigation are critical to build Balancers' digital payments comfort and confidence. Advice on keeping bank accounts, credit cards and passwords secure as well as instant alerts for fraudulent activity can help Balancers warm up to digital payments options. In addition, bill payments advisory services (like Prism, for example) provide peace of mind by helping Balancers avoid overdrafts.

Explorers (14 percent of consumers) – These consumers are the opposite of Balancers. They go with their guts and focus on the big picture. With the highest percentage of millennials (49 percent) included in this group to include 30 percent mass affluent consumers, Explorers are the epitome of digital payments pioneers. They are the most likely to see themselves as early technology adopters and are heavy users of online payments, in-store mobile payments and peer-to-peer (P2P) payments. Out of all four groups, they are the most comfortable sharing online bank account credentials with third parties.

Experiencers (23 percent of consumers) – These consumers are free spirits in financial terms, maximizing the moment and going with their gut over data. They are digital fast followers like Achievers, but tend to skew younger and have much simpler financial needs. They use PayPal more often than other products, which suggests a desire for payments speed and simplicity. Payments is all about the ease of transaction for Experiencers — 68 percent define their banking relationship by simple transactions.

Moving forward

Things are changing for banks. Consumers are becoming more informed, communicating amongst each other and discovering what's important to them. They are making their own financial arrangements and leaving the banks to deal with their outdated demographic models.

Banks would be wise to look at people — their current and prospective customers — with fresh eyes, understanding the way they think and what they need when it comes to money.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

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Luca Gagliardi

Based in New York, Luca Gagliardi is Payments Research Lead at Accenture, where he has worked for the past 11 years in New York, London and Milan. He and his team have executed surveys, point of views and strategy projects covering the global payments market. His main interests in payments include covering the trends and staying up to date with the digital payments revolution.

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