TROY, Mich.–The overall financial health of U.S. retail bank customers declined in May following two consecutive months of improvement due to an uncertain economy and persistently high cost of goods, according to a new J.D. Power survey.
The top reasons cited among those who say they are worried their personal financial condition will worsen in the next three months are inflation, job security, government policies, housing and personal debt, according to J.D. Power.
The company said that after consumers reported feeling more positive in March and April, the number of customers who are financially healthy dipped to 32% in June, which it said is in line with the level observed during the previous 12 months.
Rising Costs of Goods
For a second consecutive month, J.D. Power said it found 70% of bank customers said the cost of goods is increasing faster than their income. That percentage dipped slightly among healthy (57%) and overextended (58%) customers, but rose among vulnerable (79%) and stressed (84%) customers, according to the survey.
“Despite a decline in overall financial health, the number of bank customers who believe their future financial health is at risk of getting worse in the next three months has dipped slightly,” J.D. Power said. “Overall, 41% of customers think their finances are at risk, a three-percentage point decrease. Stressed customers are the most concerned (46%).”
The Biggest Worries
When asked what they are most worried about in the next three months, cost of living expenses still topped the list, followed by managing household costs, the survey revealed.
“Interestingly, concerns about the stock market declined five percentage points (22%),” J.D. Power stated.
For credit unions looking to help members navigate the uncertain times, building a relationship and understanding what each consumer values is key, survey results showed, J.D. Power said in its analysis.
Different Fears & Needs
“Not all customers will have the same fears or needs, and they’ll require an individualized approach based on their finances, age, future plans and a host of other variables,” the study states. “Banks that can cater to these specialized needs will build valuable relationships that will last beyond this period of volatility.”
