Driven by changes in the regulatory environment and pressures on product profitability, market segmentation is increasing in importance as a competitive weapon. However, still too much emphasis is being placed on descriptive studies which do not sufficiently explain differences in financial services consumer behaviour. Reports the results of a qualitative study which attempts to offer a more detailed explanation of financial services consumer behaviour. Investigates consumer‐perceived knowledge, confidence and level of involvement in dealing with financial services, and analyses the impact of these factors on financial services usage. Four segments are identified (Apathetic Minimalists, Capital Accumulators, Cautious Investors, and Financially Confused) which differ in terms of their financial services usage. The results also suggest that consumer‐perceived knowledge and confidence have an impact on the level of potential profitability which can be expected from the segments identified. Further work is being conducted to substantiate this evidence.
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