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As part of its cross-industry perspective, the MacroMonitor program keeps clients informed and armed with supporting data about key emerging issues that enable them to prepare and plan ahead to meet some of the challenges affecting the U.S. financial industry. Some of the key topics that we will focus on in 2008 include:

1. Conspicuous Consumption or Conspicuous Conservation?
2. Continuing Consumer Disengagement?
3. The Sprint to Retirement
4. Income or Accumulation?
5. New Payment Systems
6. Impact of the Mortgage/Debt Crisis
7. Is Organic Growth Working?
8. Income and Wealth Polarization
9. What's Happening with Gen X?
10. Twenty-First–Century Marketing

These topics are just some of the topics that the MacroMonitor is going to address—and will do so in ways that are far superior to proprietary research. By collecting comprehensive information about consumers' financial needs, propensities, and preferences trended over time, Consumer Financial Decisions uses the MacroMonitor to provide detailed, in-depth analysis, insights, and innovations. In addition, the fungible nature of the MacroMonitor data and CFD's expertise enables us to address new issues as they arise. For more than three decades we have been helping financial institutions to understand their products, services, and markets better and to translate these understandings into actionable results. With the continuing evolving complexities of the financial services industry, we're looking forward to another 30 years.

Conspicuous Consumption or Conspicuous Conservation?

For the past quarter century, consumers have been on a rampage—buying more, better, and bigger, whether it is food, clothing, cars, or homes. And on their way to being the backbone of the economy, consumers have spent, borrowed, and leveraged ever larger proportions of their incomes and assets. Some attitudes and behaviors suggest that this streak could be nearing an end as concerns about the environment, energy, end-of-life efficiency, and even being overweight combine to change one's ethos toward living within one's means, avoiding waste, and supporting long-term sustainability. What are the implications to the economy and to financial-services providers if this fad (or trend) takes hold? After years of exhorting consumers to save more, what if they actually do?

Continuing Consumer Disengagement?

In place of the unbridled optimism of the 1990s, the first part of the twenty-first century has been characterized by consumers' disengagement from dealing with all but the most immediate of their financial needs. Will this disenchantment and disenfranchisement continue? How do financial providers and marketers cut through the barrage of a 24/7/52 media? How do they reach consumers who have an ever-growing ability to ignore, avoid, and evade marketing messages?

The Sprint to Retirement

The increased penetration of retirement products and the amounts in them suggest that more households may be saving more for retirement, especially among the Boomers. Could this change be the heralded "sprint to retirement" that some people have predicted? Have years of haranguing begun to pay off? How about households that have more time? Are younger households that are more cynical about Social Security's solvency responding by saving more?

Income or Accumulation?

In spite of the huge increase in media attention to retired consumers' need for a dependable source of income that will last for as long as they live, Boomers have not demonstrated that they share these concerns yet. Boomers remain focused on accumulation and capital gains. How quickly they shift this focus and whether they move into fixed instruments versus equities will depend on their perceptions of personal needs and market behaviors.

New Payment Systems

Debit cards took more than a decade to become an overnight success. What will be the adoption curve for smart cards? Payment by phone? Internet micropayments? The introduction of new payment media along with the evolution of current technologies and the maturation of established ones means that the financial-payment space is in tremendous flux. The use of checks and cash may be in decline, but most of the other media are used by an evolving mixture of consumers, for a changing set of purposes. Throw into the mix some new technologies, and the landscape will change again.

Impact of the Mortgage/Debt Crisis

Low interest rates since Y2K may have encouraged consumers to borrow more. Increasing values of their homes and other real estate have provided additional equity, which many people have already tapped. What happens now that the cheap money is gone? Will increasing foreclosures start a cycle of higher and higher interest rates, causing even more foreclosures? Will heavier debt loads translate into less spending? Because people have increasingly used equity credit for financing vehicle purchases, college costs, home repairs, new business ventures, debt consolidation, and even investing, will the mortgage-debt crisis spill over into other markets?

Is Organic Growth Working?

By now, more and more financial institutions have realized that just like drinkable water and clean air, the market for customers is not unlimited. Instead of simply trying to attract more new customers, many institutions are striving to fix the holes in their leaky buckets and retain their existing customers. It is much more efficient—and less expensive—to meet more of existing customers' needs than to try to attract loyal customers of other institutions. And more strings connected to existing customers make those customers harder for other institutions to steal—and easier for existing institutions to retain as the customers go through the natural consolidation that occurs in the latter life stages. How well is this strategy working, and how can it work better?

Income and Wealth Polarization

Current trends reinforce the perception that a small percentage of households—fewer than 0.5%—are significantly benefiting from the current economy, legislation, and markets. But just below the CEOs, celebrities, sports superstars, and lottery winners is a solid 2% of households that are wealthy and doing OK, thank you very much! The additional 20% or so that fill in the rest of the mass affluent are finding their options curtailed. And households below are facing harder and harder choices. Will this shift soon affect how consumers behave? Is the middle class in retreat? Are financial institutions taking into account some of the crucial differences in affluence so as to profit from providing appropriate services to all groups?

What's Happening with Gen X?

Generation X is not following the life path that the Boomers laid out for them. Like the Boomers, some of Generation X may have delayed childrearing into their thirties and beyond; others have chosen to have children in their twenties. However, another segment of Generation X has not fully transitioned into being adults: Extended Adolescence. The financial needs of these three subsegments of Generation X are extremely different. Financial institutions that can identify, understand, and market to each appropriately will more effectively capture their business.

Twenty-First–Century Marketing

Perhaps the most important challenge facing financial institutions today is to divest the old marketing paradigm (age, income, assets) and invest in the new: Life Stages (Extended Adolescence, Child Free, Revolving Retirement, Post-Retirement). With increasing life expectancy, globalization of the workplace and the marketplace, rapidly advancing technologies, and the resultant changing mores, norms, and opportunities, the typology of the financial marketplace grows increasingly complex. Looking at this complex world through the singular perspective of age, income, or wealth provides an overly simplistic view that differs from reality and frequently can mislead marketers. At the same time, and in spite of all the choices available to them, financial consumers are increasingly looking for simplicity and the reassurance that they are doing what's right—or at least not doing what's wrong. Those financial providers that understand and integrate the multivariate complexities of modern consumers will succeed in the current marketplace. Marketing to life stages, life needs, and the life events that trigger them will be an effective way to identify, differentiate, target, and market to modern consumers, well into the twenty-first century.