Banking and Payments Intelligence Report
January 2024
Even as Financial Health Remains Troublingly Low, Bank Customers in the U.S. Resolve to Improve in 2024
As the U.S. inflation rate continues to hold steady, bank customers in the United States are hopeful to take charge in 2024, even in the face of their current economic struggles.
According to JD Power, while the percentage of U.S. bank customers that are financially healthy[1] remains near the all-time low, four-in-five customers plan to eliminate debt, improve their budgeting and set specific savings goals in 2024.
Financial Woes Continue
Customers’ financial health remains troublingly low. Just more than one-fourth (29%) of respondents are financially healthy, while 46% fall into the vulnerable category. These numbers are in line with the previous three months.
Customer sentiment regarding financial health status, stress levels and empowerment to improve one’s financial situation also remain virtually unchanged from the previous month. What’s more, 40% of customers remain extremely worried that the prices for common goods will continue to rise.
New Year, New Budget?
With the start of the new year, many customers are inspired to improve their financial health. More than one-third (36%) of customers say they plan to pay down debt throughout 2024, while 33% say they will create a budget or spending plan, and 29% say they will establish an emergency fund. All these response levels reflect year-over-year increases from December 2022. Notably, customers under the age of 40 were more likely to say they would make these changes.
When asked which tools that banks provide are particularly helpful to achieving these goals, credit score reporting (66%); spending summary or analysis (66%); and savings goals and budget trackers (60%) rank high. Financially health customers are more likely to find tools helpful, and younger customers are more likely to utilize these tools.
The Stress Test
When customers who do not use tools that banks offer to improve their financial situation were asked why, 49% said they already have their own system to monitor their finances, while 25% said they get this support from outside their bank.
Interestingly, there is also an emotional barrier to tool adoption. About one-fifth (21%) say that looking this closely at their finances causes them added stress, and another 17% say these tools make them feel worse about their finances. In fact, when asked what drives their overall stress, 31% of customers say finances, which is the highest response rate of any reason.
Judgment-Free Zone
As customers look to dig out of their respective financial holes, they need to feel like they have a partner in their climb. Banks can be integral to that journey, but only if customers feel that they are not being judged and that their financial institution has a real plan to move forward.
Staring down a big debt number on a spreadsheet or working with a budgeting tool that creates a plan that doesn’t feel realistic can create a divide between the customer and the bank. And when that happens, customers feel like they must turn elsewhere. But these financial institutions are uniquely positioned to help, and in the process, build relationships that will continue toward better economic times. Banks that can find a balance in their constructive criticism will be rewarded.
Find out More
This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in December 2023. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.
Media Contacts
Brian Jaklitsch; East Coast; 631-584-2200; [email protected]
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]