Nielsen identifies investment strategies and financial habits of the global consumer

More than half (52%) of global online consumers indicate they use credit cards as a common payment method for dining, shopping and entertainment activities while 43 percent use debit cards, according to a new study from Nielsen, a leading global provider of information and insights into what consumers watch and buy. Nielsen’s study shows that nearly three-quarters of global online consumers who invest use online banking for their investment transactions.

Nielsen’s Global Survey surveyed more than 28,000 Internet respondents in 56 countries regarding their investment attitudes and shows that one-third of global consumers invest their money. Of those investing, more than two-thirds (67%) prefer stocks, 52 percent invest in mutual funds/unit trusts, 33 percent invest in gold, silver and other precious metals, while 32 percent invest in bonds, 31 percent in structured investment products, 22 percent in foreign currencies and 21 percent in derivatives. Survey respondents indicated that globally, men are 36 percent more active investors than women.

“As global economies continue to focus on ways to accelerate economic growth, consumers show an increased appetite for saving and investing,” said Oliver Rust, managing director, Nielsen Hong Kong. “It's important for finance and investment companies to know how consumers are investing, saving and paying for goods and what opportunities exist across both the developed and developing economic landscape.”
Investment Transaction Channels

According to Nielsen, nearly three-quarters (73%) of global online consumers investing their money use online banking for their investment transactions while 69 percent conduct transactions at the bank (physical branch). Thirty-one percent of global investors use mobile phones for investment transactions, followed by 30 percent using a land line phone and 26 percent using an online investment brokerage or investment service provider. Twenty-two percent use financial planners/advisers to conduct investment transactions.

When examining global investors by age, Nielsen finds that while 75 percent of younger investors aged 21 – 29 use online banking to conduct investment transactions, 60 percent of investors aged 50 – 59 and 50 percent of consumers aged 60 and over do so. Comparatively, 15 percent of investors aged 50 – 59 use mobile phones for their investment transactions while 41 percent of consumers under 20 and 35 percent of consumers aged 21 – 29 do so.

“Online banking rivals physical branch banking around the globe, especially in Asia-Pacific and North America,” said Rust. “And although concerns exist around security, consumers are seeking information through their mobile phones for investment decisions. The adoption of this platform is greatest amongst younger age groups and as the level of smartphone penetration accelerates, mobile usage for investment decisions is expected to grow accordingly, becoming a vital tool for making swift investment transactions and capturing different investment opportunities on the go.”
Payment and Repayment Methods

Nielsen’s survey shows that when it comes to how consumers around the world prefer to pay for general shopping, dining, traveling or entertainment expenses, 80 percent pay with cash, 52 percent use credit cards, 43 percent use debit cards and 10 percent use checks.

Of those that use credit cards, 68 percent of global online consumers indicated they repay all of their credit cards in full each month, 15 percent repay some of their credit cards in full each month and ten percent repay only the minimum. Six percent repay more than the minimum.

“Cash still dominates but plastics are increasingly replacing cash as a payment tool,” said Rust. “Paying with cash is very much ingrained in many cultures around the world where payment for goods and services is immediate. As wealth accelerates for consumers in emerging markets and the availability of payment terminals increase, we will see a greater level of acceptance of electronic payment methods over cash.”

Respondents in Asia-Pacific are more receptive to using credit cards (59%) compared to other regions, and North Americans showed the highest propensity to use debit cards (63%). Middle Easterners are the least receptive to using either credit (29%) or debit (26%) cards as a preferred payment source. According to Nielsen’s survey, credit card usage is highest in Asia-Pacific markets such as Hong Kong (76%) and Singapore (62%).

“While consumers in these mature markets have a high credit card usage, most treat credit cards as a cashless payment tool for convenience and repay the debts in full every month,” said Rust.
Financial Advice

Nielsen’s survey shows that when making personal finance or investment decisions, nearly half (49%) of global online consumers rely only on themselves. Twenty percent of respondents seek advice from a financial planner/adviser while 18 percent rely on friends, relatives and colleagues for advice. Nine percent rely on investment tips from television, radio and Internet commentators/experts and four percent make investment decisions on impulse. Based on survey responses, women are 25 percent more likely than men to rely on friends and family for advice on personal finance matters.
About the Nielsen Global Survey

The Nielsen Global Survey of Financial Status was conducted February 10-27, 2012 and polled more than 28,000 online consumers in 56 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey was established in 2005.

The investment strategies reported in this study are based on online consumers who have indicated they currently use investment services, which include stocks, mutual funds, bonds, certificate deposits, local and overseas stocks, derivative tools and foreign currency for investment purposes.