Marketing experts are beginning to zero in on the groups of consumers who seem most favorably disposed toward electronic banking services.

The marketers are bringing a new sophistication to services like debit cards and computer banking, relying on segmentation techniques that have been applied successfully in financial services and other consumer markets.

The research indicates unrealized opportunities to build profitable businesses in and around the appropriate market niches. And it is not so simple as targeting younger, educated, upwardly mobile people.

For example, the 1993 American Banker consumer survey, conducted last spring by the Gallup Organization, showed that among those most interested in home banking via personal computer were people 45 to 54 years old, and people who are customers of brokerage firms.

These are older, financially more established, and potentially more profitable groups than those at which many banks aim their advertising for electronic services - if they advertise home banking at all.

In a more comprehensive research effort focused on electronic services, Payment Systems Inc. of Tampa, Fla., has identified about six market segments, ranging across all ages and incomes, that are particularly receptive to automated teller machines, point-of-sale debiting, and home banking. (See table on facing page.)

|Product Thinking'

Neil Chambliss, a Payment Systems vice president, said it is high time that bankers use "product thinking" to promote advanced delivery systems.

The traditional marketing components of "promotion, positioning, and price have just not been done" in delivery systems, Mr. Chambliss said. "Until it has a product aspect, it will be a tough sell."

The six receptive segments include most of the approximately 94 million U.S. households, which Payment Systems has divided into 11 segments.

Some of the marketing opportunities will be more interesting than others. For example, the class of people the firm calls "younger lower" - low-income people under age 65 - show above-average interest in the convenience of home banking but probably would not yield much profit.

"When we introduce pricing into the question, interest falls off by about 50%," said Martha Rea, senior vice president of Payment Systems.

On the other hand, there are a lot of "younger lowers" - one of every eight households.

The same might also be said of members of the "mass market" - ages 35 to 65, annual income $15,000 to $35,000 - who show debit-card and phone-banking potential. There are 20 million households in this group, and perhaps enough would be interested to define a business proposition.

Different Folks

At the top of Payment System's prospect list are the "young mass" and "middle family" segments - 21 million households spanning age groups up to 45 and income up to $75,000.

According to Ms. Rea, the "young mass" on average are 30 years old and earn $35,190 a year; 46% are married, they average 2.6 household members, and 40% are in managerial or professional jobs. Their attitudes are summed up as: "There is never enough time." Their concerns center on money.

The "middle family" group averages 43 years old and $59,880 in household income. Eight out of 10 are married, they average 3.3 household members, and 70% have managerial or professional jobs. They generally agree that "they are confident in making decisions based on their own judgments."

"Younger affluent" households - seven million whose earnings above $75,000 make them especially attractive to bankers - tend to be less interested in phone banking than in ATMs, debit, and PC banking. They share the desire to make their own decisions and are especially comfortable with technology and its benefits. All the electronic banking target markets say they are willing to take on some extra work if it means additional comforts and luxuries, Ms. Rea said.

Different Strokes

Segmentation may be taken to still another level next week when the Bank Administration Institute and First Manhattan Consulting Group release their long-awaited report on retail delivery systems at a institute-sponsored conference in New Orleans.

Looking ahead to retail banking in the year 2000, the study is expected to project a decline for branch banking as practiced now. But when the consumer market is examined segment by segment - by banking preferences as well as conventional demographics - trends emerge that are not monolithic.

In a preview that he delivered at a Bank Administration Institute conference in September, Eugene Lockhart of First Manhattan said 49% of consumers already use ATMs exclusively to obtain cash. Twenty-three percent use branches exclusively, and the rest use both.

When it comes to account sales and servicing, 46% use branches exclusively, 15% rely entirely on nonbranch methods like the mail and telephone-service lines, and 39% use a mix of branch and nonbranch systems.

Forces of Change

The characteristics of each service-preference group are different, and bankers would probably want to adjust their marketing approaches accordingly, Mr. Lockhart suggested.

Market and economic forces are driving U.S. retail banks to change branch banking," Mr. Lockhart said. Some consumers and transaction services "are moving away from our branches," he added.

"In the study we will factor in the deposit contributions of the various segments and their effect on profitability," said Nik Banerjee, director of retail banking at the Bank Administration Institute in Chicago.

Mr. Banerjee said there will be serious ramifications not just for the financial delivery systems but for the way institutions are organized and managed.

"How do you restructure the organization and change the culture of an industry that has had one dominant delivery system. the branch?" Mr. Banerjee asked. "You have to organize around a very different set of delivery systems and objectives.

"It is not a deposit-oriented business anymore - it is relationship driven. We are competing for |share of wallet.'"

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