Alkami's 2024 Telemetry Data Report Highlights the Effects of a High Interest Rate Environment on Consumers, Financial Institutions
Alkami Technology, Inc. announced today the release of its latest research, the 2024 Alkami Telemetry Data Report. The report examines the high interest rate environment and its impact on consumers and financial institutions. The transaction data was compiled from an aggregated panel of more than 2.5 million account holders. The data was supplemented by an Alkami-commissioned research study, conducted in partnership with The Center for Generational Kinetics that surveyed 1,500 digital banking consumers in the U.S., to assess how the current macroeconomic environment has impacted attitudes and behaviors of the different generations.
As U.S. consumers are facing a credit reliance with rising levels of debt reaching over $17T by the end of Q1 2024, the report highlights trends relating to common consumer deposits, and credit products like mortgages, home equity lines of credit (HELOCs), auto loans, credit cards and buy now pay later (BNPL). The findings examine the implications for deposit, loan, and payment products at regional and community banks and credit unions. Key findings regarding these products for financial institutions include:
Sixty-seven percent of digital banking Americans say the rising interest rate environment has had a significant impact on their standard of living and 59% are living paycheck to paycheck.
Mortgage originations have been on a steep decline, with 72.5% fewer originations in December 2023 compared with December 2020. The amount of mortgage loan principal, a helpful proxy for trends in home prices, increased by 42% from December 2020 to December 2023.
The average drawn balance on a HELOC rose by 31.7% from December 2021 to December 2023.
The average new car buyer in December 2023 is paying $323, or 57.1% more per month for an auto loan than the average new car buyer from December 2019.
The number of CD openings in Q1 2023 was 10.8x higher than the number of CD openings in Q4 2021. By the end of 2024, 87.7% of the CD balances held at the end of Q4 2023 will mature.
The average credit card payment has been increasing since 2020, reaching $2,376 by 2023, a 19% increase over pre-pandemic levels.
There were 5.17x more BNPL users in 2023 than in 2019.
"Through this research, and Alkami's other tools like the Digital Sales & Service Maturity Model Assessment, banks and credit unions can not only assist their account holders in mitigating the effects of high interest rates to strengthen loyalty and provide the best digital banking experience, but also can be informed on where their institution may lie on the competitive curve," said Mark Leher, director, product management at Alkami.
To read the full 2024 Alkami Telemetry Data Report, visit here. Financial institutions can take action now to assess their competitive position and digital maturity level by taking Alkami's Digital Sales & Service Maturity Model Assessment.
