Consumer Wealth Tops $60T! How to Drive Deposit Growth and Expand Share of Wallet

In today's ever-changing financial landscape, understanding wealth trends is a critical part of an effective deposit and investment growth strategy. To help financial institutions fine-tune their marketing efforts and gather more deposits they need insights on:

• asset growth, 

• consumer wealth segments, 

• and geographic data.

Let’s take a look at some highlights from our Wealth Trends report to identify opportunities for strategic growth.

Consumer invested assets have skyrocketed 215% in the past 15 years

U.S. wealth has experienced remarkable growth in recent years. Total consumer invested assets have grown an incredible 215% since the recession in 2008, reaching $60 trillion in June 2023. Despite a few blips, such as the “flash” crash in 2016 and the Coronavirus crash in 2020, the market has shown resilience. In fact, there have been significant gains in invested assets in the last few years. Median household assets grew by 77% from 2020 - 2023. If you’re wondering what’s fueled that growth, it’s the stock market’s performance.

Wealth and deposit growth opportunity is concentrated 

Overall wealth growth has been on the upswing. However, it’s essential to recognize that the distribution of wealth remains imbalanced. This trend was apparent before COVID hit. But the post-COVID K-shaped recovery significantly accelerated the further concentration of wealth.

• 97% of the nation’s invested assets are held by just 45% of households

• 70% of the nation’s invested assets are held by just 10% of households

Do you know which of your customers are part of the 10% of households that hold the majority of assets? These customers can easily be hiding in your customer base. That’s because they can be holding a significant amount of their assets with another firm.

Typically only a small portion of your customers and prospects are likely to hold significant assets and deposits. The key to driving KPIs and long-term customer lifetime value is to find and market to these customers. Simply put, you need to determine which of your current customers hold high deposits at other firms. And you need to identify prospects that have high deposits. With those insights, you can narrow your marketing focus to reach those consumers and capture more deposit dollars.   

The K-shaped economy persists: Deposit growth is unevenly distributed

Wealthier households have reaped more benefits from asset growth than less wealthy households. Let’s look at just deposit dollars. The Affluent and Mass Affluent tiers experienced the highest gains in deposits between June 2020 and June 2023:

• Affluent households (over $1M in assets) increased deposits by 13% - a $1T gain

• Mass Affluent households ($100K-$1M in assets) increased deposits by 20% - a $0.8T gain

• Mass Market households (less than $100K in assets) increased deposits just 6% - a $49B gain

This growth disparity across consumer wealth tiers was even more pronounced for investment dollars. Investment gains for the Affluent tier was up 44%, translating into a whopping $10T increase. This is largely because Affluent households hold more stocks in their portfolio than other households. And as noted above, the market increased a significant amount during the past few years.

Understanding these disparities should translate into action for financial marketers. Namely, marketers need to gain a holistic view of consumers’ total asset and deposit potential. Financial marketers that accurately identify Affluent and Mass Affluent customers and prospects - especially those that hold high assets at other firms - can zero in on these consumers. These are the consumers that will likely continue to increase their wealth over time. They offer more deposit opportunity for your firm.  

Where can you find more deposits?

Financial marketers can analyze wealth changes at a geographic level. Then they can discover which regions of the country warrant extra marketing dollars for deposit growth campaigns. According to our Wealth Trends report here are some states to focus on (based on changes in deposits between 2020 and 2023):

• High population states had the highest dollar increase in total deposits: California, New York, Texas, Florida, Pennsylvania

• Low population states experienced the highest percent increase in total deposits: Alaska, Wyoming, Arkansas, Mississippi, South Dakota

• The Wealth Trends report also details which states had the highest dollar and percent increase in median deposits.

State-level insights are just a start. Financial marketers can also leverage estimates of total deposits within specific geographies relevant to their firm. With this, analysts can discover areas with rising deposits within their target markets. Plus assess their share of deposit dollars and households within defined territories, branch regions, or other geographies. Then they can better optimize branch networks and set regional sales goals.

Find your next generation of deposits 

Overall, young households don’t hold a lot of wealth. These households, commonly known as Gen Z, only hold about 2% of all U.S. investable assets. But there is a segment of Gen Z households that should not be ignored. It’s a highly concentrated segment: 5% of Gen Z households control about 60% of this cohort’s assets. This group presents a significant long term customer value opportunity. If you efficiently target these consumers you can drive growth today and in the future. 

Where is there opportunity to find these young affluents? Our analysis shows:

• States with the most young affluent consumers: California, New York, Florida

• States with the highest percent increase in young affluent consumers: New Jersey, Ohio, Oklahoma

Navigate the U.S. wealth landscape to stay ahead of the curve

With insights into the state of wealth across the U.S., you can enhance strategies to grow deposits and identify hidden opportunities. Our Wealth Trends report offers an annual update on the nation’s wealth, but it’s just the tip of the iceberg. Contact us for a custom analysis of deposit opportunity within your customer base and target markets. 

For more on deposit growth, review our ebooks and read our other blogs: 

• eBook: 6 Ways to Grow Deposits

• ebook: The Young Affluent

• Strategies for Credit Unions to Grow Deposits in Any Economy 

• How a Deposit Growth Strategy Can Help Financial Institutions Reduce Risk 

• 6 Strategies to Maximize Deposits for Financial Growth

©Equifax Inc. 2024. All statistics are from Equifax's 2024 Wealth Trends Report. The report leverages more than ~$27T in actual deposit and investment account data that is captured by the IXI Network. These statistics are to be used for information and illustrative purposes only, and shall not be used for any other purpose.