Attitudes and behaviour in everyday ﬁnance: evidence from Switzerland ¨ Brigitte Funfgeld
ISB, University of Zurich, Zurich, Switzerland, and
Received September 2008 Revised November 2008 Accepted November 2008
Swiss Finance Institute, ISB, University of Zurich, Zurich, Switzerland Abstract
Purpose – In order to classify individuals based on their needs, this paper aims to consider both self-stated attitudes and behaviours in a comprehensive range of daily ﬁnancial affairs. Furthermore, it aims to study the impacts of socio-demographic variables such as gender, age, and education. Design/methodology/approach – A questionnaire was answered by 1,282 respondents in the German-speaking part of Switzerland. Factor analysis revealed ﬁve components. Based on these components a two-step cluster analysis (Ward and K-means analyses) identiﬁed distinct subgroups. Linear regressions were used to investigate the impacts of socio-demographic variables. Findings – Factor analysis revealed ﬁve underlying dimensions of ﬁnancial attitudes and behaviour: anxiety, interests in ﬁnancial issues, decision styles, need for precautionary savings, and spending tendency. Cluster analysis segmented the respondents into ﬁve subgroups based on these dimensions with an ascending order of speciﬁc needs for ﬁnancial products. Gender, age, and education were found to have signiﬁcant impacts. Research limitations/implications – Real consumption behaviour cannot be observed through the survey, which limits the external validity of the study. Practical implications – The segmentation identiﬁes different levels of ﬁnancial competence and needs for ﬁnancial products. It allows ﬁnancial service providers to offer more effective advice and to meet customers on their own level to improve personal ﬁnancial management. Originality/value – Attitudes and behaviours in daily ﬁnancial affairs are examined to reveal individuals’ ﬁnancial competence and consequential product needs. A heterogeneous sample covers a variety of demographic groups. Keywords Personal ﬁnance, Savings, Questionnaires, Factor analysis, Cluster analysis, Switzerland Paper type Research paper
Introduction Everyone has to manage his or her personal ﬁnance in one way or another. Some tend to save a lot, some like to collect information before each purchase, some like to follow their gut feelings. Private investors are not a homogeneous group but rather The authors would like to acknowledge the support of the University Research Priority Program “Finance and Financial Markets” of the University of Zurich and the National Centre of Competence in Research “Financial Valuation and Risk Management” (NCCR FINRISK), Project 3, “Evolution and Foundations of Financial Markets”. In addition, they would like to thank the Swiss ﬁnancial company that provided them with client data and the anonymous referee for the helpful comments.
International Journal of Bank Marketing Vol. 27 No. 2, 2009 pp. 108-128 q Emerald Group Publishing Limited 0265-2323 DOI 10.1108/02652320910935607
individuals with various ﬁnancial practices combined with different levels of experience, anxiety and interest in ﬁnancial matters (Gunnarsson and Wahlund, 1997). In an increasingly competitive marketplace, ﬁnancial institutions need to emphasise customer relationships and the retention of existing customers that require an in-depth understanding of their attitudes and behaviours (Harrison and Ansell, 2002). The heterogeneous market is divided into smaller more homogeneous groups to meet speciﬁc needs with a corresponding business model (Jenkins and McDonald, 1997). Market segmentation relies, in the ﬁnancial industry, largely on socio-demographic information to deﬁne segments for speciﬁc services (Harrison, 2000). It is questionable ¨ as to how appropriate they are (Jorg, 2005),...