Finances, Feelings, and Fears: A Deep Dive into the Data

Hello, welcome.

My name is Leah Hacker.

Thanks for joining me on this on-demand session.

Sorry I missed you guys at MXS. I was tied up with Hurricane Milton.

But I'm glad that you guys had a great conference and I'm so excited about chatting with you about the data.

To get us started, let me tell you a little bit about who I am and what we do.

So this is the Finance, Feelings, and Fears: A Deep Dive into the Data session.

My name is Leah Hacker, and I am the CEO and founder of Rebel. Rebel's, a research and strategy firm that works with finance brands to help them better understand who their audiences are.

We answer all kinds of questions.

We work with all kinds of institutions from scrappy FinTech startups to legacy 100 brands.

And really the questions that we're helping them answer are critical to their growth strategy.

So things like where do we differentiate in a crowded marketplace?

What does our customer expect from our brand, from the products that we put out?

And how should we prioritize our product roadmap?

So identifying things like pain points and frustrations, areas of improvement, or competitive advantages in the space.

Those are all types of questions that we answer for our conversation today.

We're gonna take a step back from finance in general.

We're very specific and we're gonna talk about behavior.

Part of our work as a research and strategy firm requires us to answer all kinds of questions about how we live and exist in the world today and what some of the perspectives are around the tools that we use, the technology around global things that are happening or really, really kind of focused things that are happening within our community.

We're interested in feelings and perspectives, but also how those perspectives turn into behavior and expectations for brands.

So for our conversation today, we're gonna talk about specifically about behavior.

Over the course of the year, we've been collecting all kinds of data on different topics, and we're gonna walk through that data today.

And then at the end, we're gonna provide some recommendations for the finance industry specifically, based on the story that we're telling.

All right, so to get us started, we're gonna start with the most kind of crunchy of all topics.

We're gonna just dive right in head first for the 2024 election.

So over the course of the year, Rebel collects quarterly data on the perspective of consumers about the economy, how we're doing, what they're worried about, what are the top of mind questions that they have, or concerns how they're feeling about money in general.

And this year, the data took a very specific turn towards the election.

In fact, what we started to see was consumers wrapped the conversation around money and the economy directly around the election itself.

So let's dive in and have this conversation.

One of the things that came through the data for every single quarter this year up through quarter three, is that life is expensive.

People are feeling the crunch.

This isn't new information, but we heard it over and over again.

This particular mom of two, with a household income of 95K — between trying to afford daycare, the cost of groceries feels ridiculous.

And she's finding herself in a dual income home trying to, trying to make decisions and choices between long-term planning and day-to-day maintenance of her life.

The surprises that life often brings doesn’t seem to help the situation.

And so there was a great deal of frustration.

This is not a singular sentiment.

We've seen this kind of happen over the course of the quarters.

For the — in terms of — when we asked individuals how they're feeling about the economy moving through the rest of 2024.

So this was Q1 data as well as Q2, and then we followed up in Q3.

What we found was that for the most part, Americans are worried. They are skeptical or reporting a level of skepticism about the U.S. economy and its stability moving forward through 2024.

But what is interesting here is that while 40% in Q3 report that they're worried there is a little bit of hope here, we are seeing Americans continue to report that while they may be worried, there's also a level undergirding of hope that's holding out as they kind of move through the year.

So right at about 28% of respondents in Q3 reported that they were hopeful.

They were hopeful that things were gonna start to turn around.

We do know that it's widely reported that Americans are stressed.

In 2024, the economic pressure seems to be hitting close to home.

So some of the things that we've heard over the course of the last three quarters is that paying monthly bills have been difficult, high food prices, and then recession.

Interestingly enough, in Q1, recession was a, top three concern, coming out right at 17%.

We're worried about recession.

We've seen this continually drop as we move through the year.

That's not so much of a concern, but those high food prices continue to move forward.

It's top of mind for individuals.

And in fact, for Q3, this was the biggest pressure that Americans reported that they were facing.

In 2024, we asked some questions around their confidence in the ability for the U.S. government to — their ability or competency, if you will, to manage the current economy.

What we found was this level of confidence had a relationship with, at the very least, their level of hope or worry or skepticism as they started to move forward throughout the year.

But it looks like we're kind of cut right down the middle.

So nearly half of American adults reported that they have zero trust whatsoever that anybody's driving our economic bus, so to speak.

While the other half of Americans are holding out hope that it's at least somewhat under control, they have, there's a little bit of confidence that we're starting to move towards, the move in a direction that feels manageable for American homes.

This could be a number of reasons.

It could have something to do with the way that feds have rolled out or not rolled out, interest cuts.

It could have something to do with their own personal budget.

At any rate, we know that as we've tracked this over the year, over the course of the year, we've seen this fluctuate, but stay pretty, pretty right down the middle.

Half of us have zero trust, and half of us are at least holding out hope.

When it comes to the election itself, we all know that this has been a really tight race.

We also all know that the economy has been an ongoing area of focus.

We've seen this swap from Biden stepping out and Kamala Harris stepping in.

And although these numbers continue and will continue to fluctuate up until voting day, we are seeing that the reason, interestingly enough, the reason why people are reporting, who they're voting for, seems to be really tied to a set of conviction.

Either nearly a quarter of folks made their decision, their voting decision on the sole purpose of keeping the other candidate out of the White House.

And we have some really strong opinions about why they are voting for their candidate, whether it's they believe it's a they are a great candidate, or they're just not sure, but maybe they're the best.

When it comes to the economy itself, the economy continues to play a critical role in their choice of who they vote for as president.

In Q3, we saw this match exactly for Q2 of 58% that the economy is a kitchen table topic and critically influences who they're voting for for president within the election.

We've got a lot of noise this year.

So we do know that the media is loudly broadcasting.

There's a lot of opinions between social media, the news, news cycle, as well as opinions and thought leadership that are available to us.

We were curious to see how Americans are measuring their trustworthiness in the media specifically.

And what we found was that across different age groups, generally, folks believed that the media was not trustworthy.

In general. We left the definition of media in this particular question, pretty general on purpose, but the Gen X and boomer population, nearly 50% deemed that the media was not trustworthy.

Moving into where individuals collect their most trustworthy news or information in general, typically, the news outlets are deemed most trustworthy.

What is interesting was that for the millennial population as well as Gen Z, social media was relied on as the most trustworthy news or information, or at the very least, counted as trustworthy.

All right, moving right into trust and consumers.

The topic of media trust, we kind of moved right into the second data set.

And this one comes, this is a topic that we see brands grappling with quite a bit.

We like to believe that building trust in general, as a brand or as a tech, as within technology, requires some level of, it's a little bit nebulous or ambiguous.

How do we find it? How do we keep it, how do we inspire trust in our brand, especially when it comes to money?

These are really big questions.

And we asked really big questions to consumers.

So we took, we asked questions around their trust in general for brands at a broad, very broad level.

And then we pulled it back and we had a very specific conversation about trust and finances, and people came to the table with some really kind of poignant opinions about the finance industry in general.

There was a consensus that banking institutions have some hurdles when it comes to trust, largely influenced by the context of the individual.

We graded industries this year, specifically on how trustworthy they were with zero being not trustworthy at all, and a hundred being completely trustworthy.

We then took those industries and compared them to each other across the segment of respondents.

Most industries kind of lived in that middle ground area somewhere between the fifties and the sixties, seventies, not, there's not one single industry that rated — that consumers rated as being a hundred, a hundred trustworthy or a hundred percent trustworthy.

However, when we looked at the different segments between men and women, what is interesting is finance for men was counted as the top 10 most trusted industries according to men, according to women, this is not the case.

They didn't make the top 10.

Something to think about as we started to move through the conversation.

So when we start talking about trust itself, when in the context of the finance industry, we've gotta pull it back a few steps and talk about trust within brands itself.

How is it understanding how it's measured and how it's lost and how it's won?

Like I said, we like to believe that it's a very specific kind of nebulous way to earn trust.

Uh, not necessarily true.

When we ask consumers what factors influence their decision to trust a brand, consistent product quality and positive past experiences with the brand, were the top two influence or factors that influence their decision to trust.

When we see things like this, one of the things that comes to mind is trust is really deeply old fashioned.

It's rooted in behavior.

So when we see brands who are inconsistent, when we have previously negative experiences with the brand, just out of nature itself, human behavior, we struggle to trust that brand going forward.

It's the same in a person to person relationship, just as it would be with a brand.

We looked at trust across the different age segments in general, and for all age segments across the board, that bad experience was reason enough to stop trusting the brand regardless of industry.

However, what is interesting here was that Gen Z seems to be the most, Discern — particular, maybe would be a good word, the most particular audience, because their, number one reason was split across factors.

While we saw for our boomers in Gen X, a bad experience in general was enough to stop trusting the brand, the majority for our Gen Z, it was a bad experience, a general bad experience for customer service, for brand reputation or inconsistent quality that would make a Gen — that would encourage a Gen Z to step away from a brand.

When we dig into how individuals are using technology across ages in general, we start to see their expectations, just like their expectations of trust start to differ among generations.

We see the same things start to happen, how they're using technology.

Again, these were broad questions with some really key take homes for the finance industry in general.

AI is all the rage right now.

However, a lot of the feedback that we, we heard when it came to AI, trusting AI or understanding how it's, being implemented in services, individuals had a conflicting feeling about it.

Not all of them were excited about it.

Some of them described it feeling intrusive.

It was popping up everywhere.

And as this person stated, without rules or regulation, it just feels risky.

When we look at technology across ages, just general technology use efficiency, we could all agree that efficient, that technology is offered some efficiency.

However, with, the conversations that we're having with consumers, there seems to be a growing desire for balance.

So nearly 75% of each age cohort reported that they actually prefer an in-person interaction versus technology.

Everybody agreed that technology generally made their life easier or made them more productive in their work life.

When we started to get into questions around balance, that's where we start to see a little bit of the difference start to pop among our segments.

There's been a lot of recent reporting lately of the feeling or of smartphone use in general, and its impact on mental health.

We see this popping up with how individuals are describing their tech use.

22% of Gen Zs reported feeling disconnected, and 19% of millennials reported that their mental health has suffered because of their smartphone use.

Again, this is just general tech usage.

This isn't specific to productive apps or specific work use function.

However, how they are using or what they are associating with technology seems, especially for our millennials and Gen Zs seems to come, to the table with a lot of anxiety, guilt.

Some people are reporting shame and regret.

When we start to talk about anxiety levels without phones, when they don't have their phone with them.

43% of millennials report that they experience anxiety when they don't have their phone on their body.

The younger generations, both Gen Z and millennials, seem to report the most negative outcomes when it comes to their tech or smartphone usage with, 26% of millennials and 24% of Gen Z's reporting feelings of regret or guilt, and a direct impact to their mood as well as their overall mental health.

This isn't new information, and of course it's not specific to the finance industry in particular, but their, what is interesting and why this matters for the finance industry is that there does seem to be a shift happening in how younger cultures are using technology or maybe even what those expectations mean moving forward.

We know that 42% of Gen Z adults and millennials express the desire to incorporate more devices in their life that lack digital capabilities.

So we see them kind of going back more, swinging back more towards, or at least having the desire to do so.

Back towards more analog type technologies.

55% of Gen Zs have turned off notifications to assist with technology overwhelm.

And 41% of Gen Zs have either taken a break from social media or completely deleted an app for mental health reasons.

Now, when we step back and we look at things like notifications, and we look at things like social media, those are primary channels for communication for brands.

As we start to see younger cultures step up and put some boundaries around their tech usage for other reasons, for reasons outside of the brand, perhaps mental health or just to combat overwhelm, these are stats that are important as we start to think about growth tracks and developing an out an outward bound, communication with our audiences.

So what does all this have to do with tech, with finance specifically?

Well, when it comes to financial services, having a hybrid service model, a combination of both those in-service in-person services and online resource was preferred to having strictly in-person or strictly online products.

What was interesting was that of course, the more technology or the more advanced the service was, the greater the desire to have access to a person or a more hybrid model.

So when we looked at things like opening a checking account, younger generations preferred a hybrid model where older generations equally preferred a hybrid model.

But we also saw some individuals that were okay with either in person or online, but for the most part, right at the majority of populations preferred the hybrid service model.

When we looked at AI in particular, regardless of age, 47% report that they're only somewhat comfortable with AI being implemented into the finance industry.

In general, our boomers were the most concerned group.

So 47% are concerned.

However, the majority of us were right at skeptical ranged anywhere from curious, skeptical, and concerned.

When it came to excited, our millennials were the most excited about AI being implemented into everyday technology.

Interest — Gen Z, not so much so only 15% of Gen Z reported that they were excited compared to 18% of Gen Z who were skeptical.

And then 20% were curious when it comes to the jobs AI can do in finance.

The rule of thumb that emerged from the data set was that the more complex, nuanced, or even perceived riskier the financial activity is, the more uncomfortable users are with AI-driven processes.

So providing budgeting advice, 56% were comfortable and 44% reported that they were uncomfortable.

Compare this to investment portfolio management, 40% reported that they were comfortable.

60% reported that they were not. Compare this to guidance on complex financial situations such as divorce, inheritance, estate planning.

34% reported that they were comfortable while 66% reported that they were uncomfortable.

When we asked individuals about their sentiments around how kinda their thoughts around either talking with a human or managing their money through AI, really where they, what they resonated with most, which statement did they resonate with the most?

So individuals, I have questions about my money and I want the ability to talk with a human overwhelmingly across all age groups.

We saw that most people agreed, that's definitely me.

If I have questions about my money, I want the ability to talk to a human.

We saw this most prominently among our boomer population.

I wouldn't trust any of my personal financial information with AI.

We saw nearly 40% of Gen Z and millennials agreed with that statement wholeheartedly and nearly half, so 44% and 45% of Gen Z and boomer or Gen X and boomers agreed with that.

They also agreed, they don't understand enough about AI to understand how it would manage those finances.

And perhaps, some of that ambiguity is lending to some of the resistance.

So 42% of our boomers said, I don't know enough about it to understand how it would manage when we start talking about how AI should be used in finance.

Most folks agree that it should be used to provide efficiencies, but not move their money around.

And AI, for some folks, they agreed that AI was directly related with how much they choose to trust or not trust the finance industry in general.

So what are they concerned about when it comes to AI in the finance industry or implementing AI?

Most of it had to do with their information.

So data breaches, algorithm tampering or breaches, fraud or inaccurate information and recommendations overwhelmingly, regardless of age, the number one concern about AI being implemented within the finance industry is, data breaches.

How are you going to keep my information safe and how are we going to continue?

How do I know that my information is safe?

So we've walked through three different data sets.

We've talked at a high level, a little bit about behavior and sentiments, everything from election to how individuals are using technology in today's world and what that use of technology, how it's informing their behavior.

So things like turning off notifications or jumping off of social media sites, apprehension into AI and the implementation into everyday technology and how that compares to finance.

So what does this mean for the finance industry with all of these kind of big contextual data sets?

What does it, what's the take home?

Well, the, some of the cues here, some of the kind of take home thoughts for the finance industry to keep in mind is to define the job that AI is supposed to do.

Individuals were expressive about the fact that AI is used as a tool for efficiency.

They could agree with efficiency that technology in general has provided efficiency into their own personal lives.

And while they may not understand AI in particular, they could get to a place where it's supposed to provide efficiencies.

The more personal AI became, or I guess the more complex the task was, the more perceived risk it had, the less likely the individual was to trust AI being involved in the process.

So from a product standpoint, and as the finance industry really starts to grapple with where this technology goes in their customer journey, really understanding the tool that AI is doing is intended to do, and making sure that there is a concerted effort to explain that, to make sure that that context is being provided back to the end consumer where AI is picking up and where it's dropping off.

So that way the consumer understands the boundaries, prioritize interaction touchpoint.

So advancement in technology has not replaced the need for human interaction, in fact, with a tech-heavy marketplace.

So we've got lots of competitors that are doubling down on their technology focus while at the same time we're seeing behavior shifts started to vary kind of infancy level among younger populations with the need to go analog or at least to create some boundaries in their personal life.

With where tech reaches, this is a really great time for finance institutions to take a step back and prioritize or at least understand how they can differentiate by caring for the customer relationship in a new way.

So things like hybrid service models, where does technology step in and where is our human relationship?

Really a differentiator could be advantageous.

Questions for finance institutions to really start to examine.

Of course, whenever we build anything in order to build it sustainably, there is value from building from real needs, not just ideas.

Right now in the marketplace, we've got lots of different, voices and lots of kind of loud advancements that are happening.

But from a finance perspective, money is deeply emotional.

And as we saw from the dataset, the very first dataset that we walked through with the election, folks are on edge.

And when we start to talk about money, when we start to talk about their money in particular, there's a lot of personal context that comes with that.

Whether they're making a decision to save for retirement or they're trying to understand how they're going to meet their day-to-day bills, or they're having to make a concession between, do I pay rent this month or do I put money away for the future?

Those are real questions and those are real big questions that come with lots of emotions.

So for finance, the finance industry, although there is lots of loud advancements that are happening, taking a step back and understanding the context behind those things, and really focused technological advancement on focusing on those gaps and those real needs of the customer — the customer population is critical as we start to move forward.

And then growth strategies for finance needs to be, must be focused on a both/and approach.

So we're moving. We had started this a few short years ago.

We started this digital only kind of marketplace.

We started really moving towards the digital transformation and for the most part, most organizations started to make that jump.

And now we're starting to see this expectation of not just a digital only marketplace, but a seamless integration between how the human to human interaction is supporting and working with that digital first component.

So as questions, growth questions are starting to be mapped out and a strategy for the next leg of growth is top of mind, remembering to take a step back and really focus on the both/and instead of in-person only, or digital only.

The questions seem to be, the questions seem to be moving towards a direction of where, where can we integrate tech and human interactions seamlessly to provide really differentiated, really valuable, services and products back to our customer population.

Alright, so that wraps up our chat today.

If you have any questions, definitely reach out.

Email is right there on the screen.

And if you are interested in more data, there's a link on the page, for downloads that takes each of these data sets that I've walked through at a much deeper level.

Thank you for your time.