Comparative Financial Portfolios of Bank and Nonbank Customers: Evidence from the Survey of Consumer Finances

By Gardner, Mona J.; Mills, Dixie L. | Akron Business and Economic Review, Winter 1989 | Go to article overview

Comparative Financial Portfolios of Bank and Nonbank Customers: Evidence from the Survey of Consumer Finances


Gardner, Mona J., Mills, Dixie L., Akron Business and Economic Review


Comparative Financial Portfolios of Bank and Nonbank Customers: Evidence from the Survey of Consumer Finances

An already competitive financial environment is likely to become even more competitive in the future as commercial banks, thrifts, and credit unions (CUs) attempt to gain market share in currently available markets and seek to increase the range of products offered. Thrifts, for example, are still working to develop a significant presence in non-mortgage lending, despite increased powers to do so since the early part of the decade. Credit unions are increasingly active in the credit card market. High on many banks' lists of desired additional products are mutual funds, full-service brokerage, and insurance.

As competition for retail customers intensifies, understanding the existing asset and liability holdings of consumers is important. Individual institutions with the requisite financial strength will need strategies not only to attract new customers but also to retain existing ones and to provide a competitive variety of services. As depositories plan for the future, the starting point must be an understanding of the financial holdings of current customers, especially those who already consider the institution their primary financial institution.

PURPOSE AND SIGNIFICANCE

The purpose of this paper is to examine portfolios of asset and liability holdings of customers of several categories of financial institutions. The research compares the financial positions of households choosing different types of relationships with depository institutions. The first set of analyses seeks to identify portfolio characteristics that distinguish households choosing commercial banks as their primary financial institution from those choosing thrifts or credit unions as their primary institutions. For these purposes, "primary" institution is defined as the one at which an individual or household holds the main checking account. A second set of analyses compares assets and liabilities of respondents holding no transactions accounts with those with a checking account at any type of depository. The objective of the latter analysis is to determine how households in the market untapped by depositories differ from depository users.

The results of the analyses are intended to provide answers to questions such as: Are commercial bank customers significantly more likely to have bond and stock holdings than thrift or credit union customers? Or do they favor indirect investments, such as mutual funds? Which customers are more likely to have brokerage accounts, insurance policies, and so forth? What portfolio of assets and liabilities best characterizes primary users of one depository versus those using another? How do the portfolios of depository users differ from those of non-users?

The answers to these questions are important because product development strategies in most institutions are affected by existing customer preferences and attitudes, as are promotion, advertising, and pricing decisions. Further, information about the preferences of competitors' customers is useful in developing strategic plans. Knowledge of which investments seem to attract which types of customers may help financial institutions make better marketing decisions in the current operating environment with its emphasis on control of non-interest expenses.

PREVIOUS RESEARCH

The data base used to develop the profiles of financial holdings of depository institution customers is the 1983 Survey of Consumer Finances (SCF), a data base collected by the Federal Reserve and six other federal agencies. Conducted by the Survey Research Center of the University of Michigan from February through July, 1983, the SCF collected detailed data on assets, liabilities, income, and financial institution relationships from over 4,000 households. The survey also asked respondents for their attitudes toward risk, liquidity, use of credit, and other financial issues. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Comparative Financial Portfolios of Bank and Nonbank Customers: Evidence from the Survey of Consumer Finances
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.