US banks and inflation: New retail banking customer segments are emerging

As inflation continues its upward trajectory and consumer confidence plummets, US banks must keep a close eye on their retail relationships, while working to understand and address evolving customer sentiments. Segmentation along demographic dimensions may have been sufficient in the past but will not be enough to win over customers in the face of sharpening economic headwinds.

Inflation is unsettling American consumers, leaving them wary, unsure, and dissatisfied (Figure 1). Consumers are concerned about their declining purchasing power, capacity to maintain their existing lifestyle, and ability to meet savings and investment goals, according to a recent Simon-Kucher study. However, despite these setbacks, a group of financially-savvy consumers have managed to find a silver lining.These optimists, who reported feeling buoyant and upbeat, were found to possess more practical experience in money matters and have been able to maintain a healthier…