.svg)
.svg)
By Crystal Gopman, CMO
Unpacking bank switching
My january piece on the offer wars got me thinking: what actually motivates consumers to switch banks? Are rich account opening incentives turning heads, or is our industry missing the mark? To answer this question, we partnered with Savanta research to understand the inner dialogue of a consumer contemplating a new banking relationship.
Do account opening incentives work?
We polled over 500 consumers in February 2024, and what we learned may be surprising to some. Despite there being countless account opening offers above $1k in the U.S. market, only 39% of U.S. consumers said account opening incentives would make them consider switching banks. It would appear banks who are spending the lion’s share of their investment budget on acquisition may be wasting their resources.
Meanwhile, 56% of consumers reported that finding better products and services at a different bank has made them consider switching. This suggests banks’ investments in branch networks, best-in-class digital experiences, and market leading product offerings might deliver more bang for their buck.
Are incentives driving primacy?
Yet, the offer wars continue despite yielding lackluster results. 40% of new accounts acquired are never activated, providing further evidence that we are approaching consumers the wrong way. When probed on this phenomenon, consumers stated these were the top three reasons why they opened a bank account but never used it were:
- Concern about the 3-5 day processing time to transfer money from an old account
- No easy way to change direct deposit
- Hassle of changing recurring payments
Could it be that banks are attempting to pay consumers to suffer through these inconveniences because they do not feel empowered to remove the underlying friction points? The 40% inactivity rate our industry continues to face would suggest there is no incentive high enough to surmount these barriers to switch. It’s time for a paradigm shift with how our industry tackles this problem.
The growth imperative: a frictionless acquisition journey
70% of all consumers say they would be more likely to switch banks if they could digitally transfer their direct deposit in seconds. And even more importantly, 81% of consumers earning over $150k - the world’s most valuable customers we are all vying for - report that they would be more likely to switch if offered this capability during account acquisition.
So, why wait? Pinwheel offers best-in-class digital deposit switch solutions that can drive immediate, game-changing results for your conversion funnel. Integration can be as fast as 30 days and our team of experts is ready to help get you started.
Click here to connect with our team and learn more.
*These findings were based on a survey of over 500 employed US consumers polled in February 2024 by Savanta Research.
