Mass affluent consumers have an affinity for Internet-based financial institutions, says Atlanta-based Synergistics Research Corp., threatening traditional providers' relationships with an important market segment. According to the financial services marketing research company, more than three in 10 mass affluent consumers (those with assets of $100,000 to $1 million) surveyed by the firm report using an Internet-based financial institution or direct bank.
"There is obviously an appeal among mass affluent households for Internet-based providers," said Synergistics CEO William H. McCracken in a release. "Of course, it can be assumed that these institutions to some extent have bought share with bonus rates and deposits or other incentives."
McCracken pointed out the long-term threat to traditional providers, urging them to position themselves against the challenge. "Deposit relationships can be weakened as customers move balances to online savings products that have a significant rate advantage over those offered in the local branch," he explained.
According to the survey, "Marketing Strategies for the Mass Affluent" -- in which Synergistics asked 800 consumers age 18 or older with assets of $100,000 to $1 million whether their households had any accounts with primarily Internet-based financial organizations, and whether they conducted all business with them online, by E-mail or by telephone -- more than 50 percent of respondents who have accounts with online financial services providers said they used an online bank or savings institution. Nearly 40 percent of respondents indicated they have an account with an online institution that provides a wide range of financial services and accounts. Slightly more than one-third said they used an online broker or investment firm, and one in 20 said they used an online mortgage lender or online insurance provider.Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio