In November 1998, Esearch (the Internet’s first market researcher) conducted a general interest study on the Year 2000 problem (Y2K) asking consumers for their opinions on the effects and possible longevity of Y2K related problems. Over 2,500 people responded to the survey and below is a compilation of the responses.

1. How familiar are you with the Y2K problem? (check only one)
   
   
• 50.3% Very familiar (you know what has caused it and its potential effects)
• 40.2% Somewhat familiar (you’ve read a thing or two and have a general idea of what’s going on)
• 1.7% Neither familiar nor unfamiliar
• 4.8% Somewhat unfamiliar (you’ve heard about it, but that’s all)
• 3.0% Very unfamiliar (you know nothing about it)
  
  

Men indicated they are more familiar with Y2K than women. 69.4% of men said they were very familiar with it knowing its cause and potential effects. Only 40.5% of women indicated this same level of awareness. Similarly, 4.3% of women indicated they were very unfamiliar (knowing nothing of the problem), while only 0.6% of men indicated this level of unfamiliarity.

The higher a person's level of education, the more familiar they seem to be. People with a post graduate degree or some post graduate work top the list with nearly 60% indicating they are very familiar with Y2K. This percentage reduces to 30% for those with some high school education.

Similarly, higher income individuals have more familiarity with Y2K than their lower income counterparts. Income levels of $125K and above have 96.5% of respondents indicating they are very or somewhat familiar with the Y2K problem.

2. When thinking of the potential effects of Y2K, are you: (check only one)
   
   
• 4.8% Very optimistic (everything will be fine)
• 64.4% Somewhat optimistic (things might go a little crazy, but generally,
• everything will be fine)
• 13.6% neutral
• 15.3% Somewhat pessimistic (we’re looking at tough times ahead)
• 1.9% Very pessimistic (no one gets it, things are bad!)
  
  

When thinking of potential Y2K effects, people are generally optimistic. Nearly 70% of all respondents indicated they were very or somewhat optimistic about the potential effects. The only significant gender difference is in the very optimistic category – twice as many men as women indicated they were very optimistic.

When looking at education, the most optimistic group is that with the least amount of education (some high school). People with vocational/technical training responded the most pessimistically with 24.3% indicating they are somewhat or very pessimistic about the potential effects of Y2K.

The group with the highest reported familiarity with Y2K is also the group with the most optimism. 76% of individuals in the $125K+ income bracket indicated they are very or somewhat optimistic when thinking about the potential effects. Most respondents (69.4%) indicated they are very or somewhat optimistic. The minority of 17.1% indicated they are somewhat or very pessimistic.

3. Would you describe your primary banking relationship as being with (please check one):
   
   
• 29.9% A large national/international bank
• 46.3% A regional bank
• 22.3% A local/single city bank
• 1.5% Don’t currently have a banking relationship
  
  
4. With your bank(s), do you have (check all that apply)
   
   
• 96.5% A personal account
• 13.2% A business account
  
  
5. Do you believe Y2K will directly effect your bank(s)? (check only one)
   
   
• 34.2% Yes
• 30.9% No
• 34.9% Don’t know
  
  

Responses by gender differed greatly with 41.2% of men indicating Y2K wouldn’t effect their banks, as opposed to 25.3% of women responding this way. Conversely, 40.1% of women and 25.4% of men indicated they didn’t know if Y2K would effect their banks.

When looking at income, the bracket of $80-99K had the highest level of certainty (42.5%) that Y2K would effect their bank. The $125K+ group had the highest certainty (40.4%) that Y2K wouldn’t effect their bank.

6. If yes to Q5 above, do you believe Y2K-relating effects will be: (check only one)
   
   
• 38.3% Short-term (a few days to a few weeks)
• 44.8% Moderate-term (a few weeks to six months)
• 9.2% Long-term (six months to a year)
• 7.5% Don’t know
  
  
43.4% of men think Y2K effects will be short-term, with everything cleared up within a few days to a few weeks. Only 29.3% of women share this view. More women (39.4%) feel the effects will be moderate-term. And, the minority of men (7.9%) and women (9.2%) think the effects will go beyond 6 months.

As income increases, so does the respondents’ perception of the rate at which Y2K effects will be resolved. The $125K+ group had the quickest perceived resolution with 89.5% thinking the effects would last no more than 6 months. The next highest group was the $100-124K respondents with 79.5% thinking 6 months would be the maximum. Only 60% of people in the >$30K range felt confident in replying the effects would be resolved within 6 months.

7. If yes to Q5 above, do you think Y2K will effect: (check all that apply)
• 64.3% Your banks administrative functions (loss of records, communications problems, etc.)
• 31.6% The security of your money on deposit
• 63.3% Information regarding loans, credit cards and other depts
• 20.6% None of the above
  
  
8. If you feel your money may not be secure in the advent of Y2K, which of the following statements describe your thoughts/actions: (check all that apply)
   
   
• 11.9% The FDIC will cover my accounts against Y2K-related loss
• 41.0% I will compile complete paper records of all accounts prior to Jan 1, 2000
• 28.1% I will withdraw extra cash prior to January 1, 2000 in preparation for possible problems
• 11.2% I will withdraw most or all funds on deposit in preparation for possible Y2K-related problems
• 21.3% none of the above
  
  
9. Have you made or would you make any changes in banking relationships based on potential Y2K problems?
   
   
• 2.7% Yes, I have moved my account to a bank with solid Y2K compliance
• 26.4% Yes, I would move my account if I found a bank with solid Y2K compliance
• 70.9% No, I won’t move my account in Y2K preparation
  
  

Gender responded generally the same when asked if they have or would make changes in banking relationships based on potential Y2K problem.

10. Is your bank providing information on its Y2K preparedness?
    
    
• 34.7% yes
• 65.3% no
  
  

More men (41.0%) than women (31.5%) have received information from their banks regarding Y2K preparedness.

As income rises, so does the likelihood the respondent has received information from their bank on Y2K preparedness. However, a meager 34.7% have received information from their bank. The vast majority has received nothing.

11. Would you describe your bank(s)’ communication with you about its level of Y2K preparedness to be:
    
    
• 40.2% Satisfactory
• 59.8% Unsatisfactory
  
  

Men were generally more satisfied with their banks’ level of communications regarding Y2K. 45.5% of men indicated they were, in fact satisfied. Only 37.5% of women shared this satisfaction. The majority, overall, were unsatisfied – which isn’t surprising considering most respondents had not received any information from their bank regarding Y2K preparedness.

12. Do you believe the banking industry is being forthcoming about its level of preparedness for the year 2000-date change and the effect of the date change on the financial services industry?
    
    
• 35.8% yes
• 64.2% no
  
  

Gender responded generally the same in their views of the banking industry's forthcomingness towards Y2K.

When looking at income, the higher a respondent’s income, the more likely they are of feeling the banking industry is being forthcoming on these issues. The split is exactly 50/50 for respondents in the $125K+ bracket in their views. This differs greatly from other income brackets. In the >$30K bracket, 37.4% of respondents feel the industry is being forthcoming, while 62.6% feel it is not. In the $60-79K bracket,38.5% feel the industry is being forthcoming, while 61.5 feel it is not.

13. Which of the following have you considered regarding potential Y2K problems: (check all that apply)
    
    
• 63.1% availability of funds on deposit with banks, savings and loans, and securities firms
• 26.9% availability of 401K, IRA and other retirement accounts
• 62.5% use of credit cards (they might not work, the companies might lose information about you, your account might vanish, etc.)
• 58.7% use of personal computers (they might not work)
• 27.7% use of personal care and appliances items that have microprocessors in their designs
• 48.0% travel safety (traffic lights might not work, airline instrumentation and tracking devices might not work, etc.)
• 46.9% utility availability (power, water, telephone, etc.)
• 45.9% Internet use

Conclusions:

There seems to be a blind faith that the Y2K phenomenon will somehow correct. There isn’t a general feeling of panic or doom associated with Y2K and in fact the people that indicate they are most familiar with it, are the same ones that feel the most optimism and that the effects won’t last long.

The surprising thing, however, is that the majority indicate they are not being communicated with in regard to Y2K – and yet this doesn’t seem to cause much apprehension. Banks could do a better job communicating as the overwhelming majority indicates they are unsatisfied with their bank’s communications regarding Y2K. This doesn’t seem to have much effect on peoples’ anticipated reactions, however. A few people have moved accounts, and some would if they found a bank with a solid Y2K policy. However, most indicate that they will do nothing.

Another surprising finding, and one that plays into the conclusion that people have a blind faith that everything will work out fine, is that most (64.2%) people feel the banking industry isn’t being forthcoming about its level of preparedness. And yet, the respondents are opting to do nothing and feel the effects will be resolved within a 6-month period.

For more information or a copy of the entire report, please contact Esearch at 310.373.1894; esearch@esearch.com