Financial Services Industry Has Highest Pricing Power of All Industries Researched, Reports the Kanbay Research Institute
15 November 2006 - 11:37PM
PR Newswire (US)
Financial Services Demand 2006 Study Reveals Which Financial
Services Companies Rate as the Most Desired Among U.S. Consumers
ROSEMONT, Ill., Nov. 15 /PRNewswire/ -- While many consider
financial services to be a commodity, consumers clearly state the
opposite. Significant pricing power, as measured by consumer
willingness to pay more to meet their desires, is the highest of
all industries tracked by Washington, D.C.-based Kanbay Research
Institute (KRI), an operating unit of Adjoined Consulting LLC, a
subsidiary of Kanbay International, Inc. The KRI studies six major
industries on an annual basis: Communications, Financial Services,
Media Content, Restaurants & Beverages, Retail and Travel.
Consumers are willing to pay 5.2% more for financial services than
any other industry, according to KRI's latest report entitled
"Financial Services Demand Today: How Well Banks, Credit Bureaus,
Consumer Credit, Investment Firms, and Insurance Companies Deliver
on Consumer Desires." The study identifies the top performing
financial services companies in each major category: -- Banks:
Comerica -- Investment Firms: Goldman Sachs -- Consumer Credit:
Ford Motor Credit and Capital One Financial Corporation --
Insurance Companies: GEICO -- Credit Bureaus: Equifax Also
performing well in the financial services industry were Raymond
James Financial, Ameriprise Financial and Charles Schwab & Co.,
Inc. "Consumers view financial services much different than other
industries, which changes what financial services firms must do to
be competitive," said Gary A. Williams, executive director of the
Kanbay Research Institute. "For example, the result consumers want
from wireline, wireless and cable communications providers is the
same: Get me my data/voice/video. But with financial services, the
result consumers want from banks, insurance, credit cards and
investment firms is not the same. That's why integrated financial
services firms find it so difficult to be successful." In the 2006
study, KRI conducted 2,262 web-based interviews with U.S. consumers
to examine their expectations, needs and desires. Consumers then
used the same set of questions to rate 41 of the leading financial
services companies. The KRI analyzed the data to identify emerging
trends that are not being met today. The financial services
industry has experienced recent growth after encountering a period
of stagnancy between the years of 2000 and 2002. Several financial
services firms are developing competitive advantages -- what the
KRI refers to as consumer moats -- to hold customers captive and
enable consistent revenue growth. However, in four of the nine
moats, no financial services firm today possesses a 5M rating (the
highest level). Charles Schwab & Co., Inc. achieved the highest
moat rating for cost containment and was also ranked as one of the
top ten most desired financial services firms by consumers. The
majority of consumers state they would rather not have a one-stop
financial services provider. This differs substantially from the
communications industry, where over 50% of consumers prefer a
one-stop provider. "The answer to de-commoditizing financial
services is not simply to consolidate multiple products under a
single banner. Firms that can present a truly integrated set of
best-of-breed solutions should find that they can secure a greater
share of customers' financial wallets, establish longer-term
customer relationships, and exert greater pricing power," said
Meetul Patel, executive director for Kanbay. "The challenge for
multi-product financial services players is that customers prefer
different channels, different service attributes and different
pricing characteristics for banking, investments and insurance
products. Fulfilling customers' expectations and securing greater
returns from broader relationships will require that financial
services firms truly understand their customers and manage these
relationships effectively across channels and products." Consumers
today state that the most critical success factor for investment
firms is executive credibility, while customer loyalty is the
number one factor for banks, credit, and insurance firms. When
comparing today's factors versus those required to be successful in
coming years, consumers clearly believe that financial services
must focus on improving their technology. The 2006 edition of
Financial Services Demand Today provides a complete list of
consumer ratings for 41 companies overall and by category. To
download your complimentary copy, go to
http://www.kanbayresearch.com/financial.html or contact us at .
About the Kanbay Research Institute The Kanbay Research Institute
(KRI) is an operating unit of Adjoined Consulting LLC, a subsidiary
of Kanbay International, Inc. Originally founded in 1998 and
formerly the independent research division of Adjoined Consulting,
Inc., the KRI conducts primary research on an original set of
leading indicators that measure consumer demand across functional,
emotional and economic factors. Through a patented research system,
comprehensive market models are built based on consumer desires
that measure how well leading companies are meeting those desires.
The KRI researches and analyzes over 300 market leading companies
on a continual basis, with over 14 million data points collected
since 2001 in a standardized fashion. The research provides
strategic, technological and operational insights about how today's
best performing companies tap into unmet customer demand to build
long-term, economic advantages over the competition. For more
information, contact 800-840-5148 (U.S. only) or at 703-788-6751
worldwide, or visit http://www.kanbayresearch.com/ . About Kanbay
International, Inc. Founded in 1989, Kanbay International, Inc. is
a global IT services firm with more than 6,900 associates
worldwide. Kanbay provides a highly integrated suite of management
consulting, technology integration and development, and outsourcing
solutions through a proven global delivery platform to clients
focused on Financial Services and Consumer & Industrial
Products, as well as an emerging presence in the Communications
& Media and Life Sciences industries. Kanbay is a CMM Level 5
assessed company headquartered in greater Chicago with offices in
North America and India as well as London, Singapore, Hong Kong and
Melbourne. Further information about Kanbay can be found at
http://www.kanbay.com/ . DATASOURCE: Kanbay International, Inc.
CONTACT: Megan Grabos, +1-312-861-4710, or , orLaura Micheli,
+1-312-861-4712, or , both for Kanbay International, Inc. Web site:
http://www.kanbay.com/ http://www.kanbayresearch.com/
http://www.kanbayresearch.com/financial.html
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