The Global Economic Crisis: The Impact on BRIC Consumer Attitudes Towards Financial Services


February 19, 2010
51 Pages - SKU: DFMN2607423
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Overview
Catalyst
Summary
The Future Decoded
INTRODUCTION: Understanding how recessionary mindsets influence attitudes towards and actual consumption is vital
Despite being more sheltered from the economic crisis than the rest of the world, the BRIC economies have still been hit hard
The BRIC countries were all affected by global economic crisis, although they now look to be back on track
Brazil's industrial demand was hit as both foreign investment money and domestic demand diminished
Russia's dependency on oil led to the deepest recession among the BRIC countries
India's export model led to dampened economic growth in 2009
China suffered from a collapse in export demand and shortfalls in foreign investment
Consumer attitudes reflect a less damaging BRIC experience
The decline in economic conditions is not as badly reflected in the state of household finances
BRIC consumers' stress levels have worsened alongside the global average, perhaps driven by different factors than the global community
BRIC consumers are much more positive than global consumers across all predictions
BRIC consumers show higher levels of concern than global consumers
BRIC consumers are particularly concerned about the value of their savings before the economic downturn
KEY TAKEOUT: BRIC consumers are more concerned with every aspect of their finances than global consumers
Since the downturn, long-term concerns have increased while short-term concerns remain unchanged or diminished
ACTION POINT: FS providers must address the anxiety of BRIC consumers with products and advice geared to alleviate this concern
Increased concerns have translated into action within the BRIC bloc, though these remain dampened by consumer uncertainty
BRIC consumers intend to increase their saving activity and look for long-term investment opportunities
BRIC consumers are looking to invest more in the long run, driven by a number of factors
BRIC consumers are more likely to reduce their debt over the next six months compared to the global average
BRIC consumers are more proactive in their financial dealings than their global peers
BRIC consumers are showing greater eagerness to explore new options for their finances
BRIC consumers are more likely to utilize the services offered at their primary bank, but may still explore new opportunities available elsewhere
Mounting competition could lead to a make or break situation for primary banks
BRIC consumers are more likely to seek out financial advice
BRIC consumers have a slightly more positive outlook on financial advice than their global peers
Brazilians support their primary bank, but need the services to be affordable
Russian consumers are strongly against paying upfront for financial advice
Indian consumers are willing and able to pay for financial advice
Chinese consumers look to online resources for financial services, and are resistant to the idea of paying for advice upfront
Financial security tops price for BRIC consumers
BRIC consumers are concerned with the ethical/green credentials that accompany their financial products
ACTION POINT: FS providers must construct a well-rounded value proposition to entice the more selective BRIC consumer
Brazilian consumers are equally focused on the stability and the return/price of the product offering
Compared to the rest of the BRIC bloc, Russian consumers are much less interested in the green/ethical credentials offered by their financial products
Indian consumers are especially interested in ethical and green credentials
Chinese consumers are influenced by a number of factors when making product decisions
BRIC consumers appear to have a higher and more resilient level of trust in their primary bank, and in the banking industry as a whole
BRIC consumers have been more influenced by a personal incident than global consumers
BRIC consumers are much more at ease with the actions of their bank than global consumers
BRIC consumers' lower product holdings in certain areas reveal potential for the future
BRIC consumers have high holdings of basic savings accounts and credit cards, but fail to embrace more sophisticated products
ACTION POINT: FS providers need to guide BRIC consumers' enthusiasm for saving into more sophisticated products that still provide peace of mind
Current accounts and certain insurance products are not as common among BRIC consumers
Appendix
Methodology
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Disclaimer
List of Figures
Figure 1: Datamonitor's Recession and Recovery portal will allow industry players to continually identify emerging opportunities and track what is happening in economies around the world
Figure 2: All four BRIC countries saw their growth dampened by the global economic crisis
Figure 3: BRIC economies have been more resilient to the global economic downturn
Figure 4: Russia is closer to the global average than the other BRIC countries
Figure 5: BRIC consumers stand apart from the rest of the FSCI sample
Figure 6: BRIC consumers have witnessed some improvements despite the global malaise
Figure 7: Russian consumers have felt the bite of the recession
Figure 8: Most BRIC consumers' finances have remained unchanged or seen some improvement
Figure 9: Chinese consumers' finances have largely remained the same
Figure 10: Job security has mostly remained constant,, with some smaller consumer segments seeing improvements
Figure 11: Russian consumers have seen their job security damaged as a result of the recession
Figure 12: Unemployment in the BRIC bloc rose in 2009 but looks set to decline thereafter, with Russia catching up in 2010
Figure 13: BRIC consumers are reporting an increase in the levels of stress in their lives
Figure 14: Russian consumers have seen the greatest increases in stress
Figure 15: BRIC consumers are more positive in their expectations than global consumers
Figure 16: Brazilian optimism contrasts the Russian outlook
Figure 17: BRIC concerns for saving are clear and offer opportunities for alert FS providers
Figure 18: Chinese consumers are more concerned about savings issues
Figure 19: BRIC consumers revealed elevated concerns before the downturn compared to global consumers
Figure 20: Chinese consumers were, in general, the most concerned consumer group
Figure 21: BRIC concerns have increased as a result of the downturn and remain higher than global consumers
Figure 22: Russian concerns have increased since the recession
Figure 23: Some FS providers have already made marketing promotions focused around rebuilding confidence
Figure 24: Paying more into savings and investing for the long term received positive responses
Figure 25: Brazilian consumers are intending to increase saving and reduce debt
Figure 26: Russian consumers will remain relatively inactive over the next 6 months
Figure 27: Indian consumers are very interested in saving and investing for the longer term
Figure 28: Chinese consumers will save more over the next 6 months
Figure 29: BRIC consumers are eager to take the initiative when queried on specific opportunities
Figure 30: BRIC consumers are mildly positive concerning financial advice compared to the negative global consumer
Figure 31: Brazilian consumers seem resistant to professional financial advice
Figure 32: Primary banks take the lead in advice in BRIC countries
Figure 33: Brazilian consumers look to their primary banks for their financial advice needs
Figure 34: Russian consumers reject upfront payments for financial advice
Figure 35: Indian consumers accept the concept of paying upfront for financial advice
Figure 36: Chinese consumers utilize online resources, pointing towards a strong future for a price comparison market
Figure 37: Financial stability is essential to the financial decision-making process of BRIC consumers
Figure 38: Brazilian consumers pay equal attention to price/return and financial stability
Figure 39: Ethical credentials fall by the wayside as stability and cost dominate
Figure 40: Ethical credentials are of great importance to the Indian consumer
Figure 41: Chinese consumers take a number of factors into account when making FS decisions
Figure 42: BRIC consumers' trust levels remain resilient to the global concerns
Figure 43: Brazilians see trust as particularly important for financial decision making
Figure 44: Publicity is influential, but personal events also affect BRIC consumers
Figure 45: Chinese consumers' trust levels were effected by a personal incident
Figure 46: BRIC consumers are much more reassured with the performance of their banks
Figure 47: Chinese consumers have been more effectively reassured by their bank
Figure 48: Instant savings products satisfy BRIC consumers' appetite for savings, but they should be encouraged to move on to more sophisticated savings products
Figure 49: Russian consumers have quite low product holdings in general
Figure 50: BRIC consumers have higher holdings of pension products, reflecting their higher anxieties for the future
Figure 51: Chinese consumers have very high holdings of pension products
 
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