Retail Banking Trends & Insights for Financial Services Marketers

Retail Banking

Covid-era shifts in consumer behavior are changing the way many Americans approach retail banking. At the onset of the pandemic, dependence on physical branches began to subside as lockdowns orders emerged across the country and consumers sought to limit their in-person interactions.  

For consumers looking to follow up on the status of their stimulus check, inquire about financial relief efforts, or simply open a new account, this shift away from physical branches lead to an increase in call center volume — and a concurrent surge in the adoption of digital banking options.  

And while digital-only banks have the potential to shake up the US banking market with defining features such as early direct deposit, short-term loans, and overdraft protections, they still lag behind traditional banks when it comes to securing consumers’ trust.  

In light of the evolving retail banking landscape, we surveyed* nearly 36K US adults to better understand consumer’s attitudes toward their current bank, and whether they plan to open a new account within the next year. The results revealed:

  • 22% of consumers are dissatisfied with their current bank, with nearly the same amount (20%) planning to open a new bank account within the next 12 months.  
  • Compared to other generations, Millennials are least likely to be satisfied with their current bank and most likely to plan to open a new account within the coming year.  
  • Men are 28% more likely than their female counterparts to open a new bank account within the next 12 months.  

Retail Banking Trends and Insights

Below we explore reasons why consumers want to open a new account, what factors help them select a bank, and how much time the decision-making process typically requires.  

Reasons Consumers Plan to Open a New Account 

For both traditional and digital-only banks, it’s important to understand the “how” and “why” behind consumers’ decision to open a new account. Of those planning to open a checking or savings account in the next 12 months, 38% will be opening a bank account for the first time, 33% plan to switch banks, and 29% are adding new accounts.

From switching banks to opening a first savings account, the decision to open a bank account also often coincides with major life events. Getting married (36%) and buying a house (24%) top the list of life events that drive consumers to open a new bank account, followed by having a child, graduating high school or college, and getting a divorce. Baby Boomers are the most likely age group to open a new bank account when purchasing a house or getting a divorce.  

Retail banking chart - life events that impact the decision to open a new account

Selling Points Consumers Look for in a Bank 

Overall, the top 3 features consumers look for in a bank are low minimum deposit and balance requirements, loyalty programs, and high interest rates – though these priorities tend to vary across generations.  

Baby Boomers are 50% more likely than other respondents to cite data security and fraud prevention as the most important features they look for in a bank – unsurprising, seeing as Baby Boomers are also most likely to express concerns about the ways companies use the personal information they collect from them.  

Retail banking chart - most important features consumers look for in a bank

Compared to other generations, Gen Z is 55% more likely to cite high interest rates as the top feature they look for in a bank, outweighing conveniences like online banking tools (11%) and an extensive ATM network (3%). As a socially conscious cohort, Gen Z is also more likely than any other generation to be influenced by a bank’s investment in social issues and dedication to diversity, equity, and inclusion. 

Retail banking chart - factors that influence the decision to open a new account

How Consumer Decide Which Bank to Choose  

Whether talking to a representative at a branch (32%) or a live agent on the phone (28%), 60% of consumers say that speaking with a human helps them decide which banking option to choose – versus 16% that prefer online research.

Chart - tools that help consumers decide which banking option to choose

Overall, consumers make decisions quickly after starting their search. 44% make the decision the same day and 40% typically do so within a week. Compared to other generations, Gen Z is most likely to take a month or more before making a decision.  

Chart - time required to select a new bank

Takeaways for Financial Services Marketers

When weighing options for a new bank, consumers of all ages rely on an element of human connection for faster decision-making.  

One-to-one conversations can be more effective than online research in helping consumers make high-consideration decisions like selecting a new bank. One they’ve started their search, those who speak to a live agent or representative on the phone are also 15% more likely to choose a banking option within the same day versus those who prefer to do online research. 

While Baby Boomers and The Silent Generation are more likely than their younger counterparts to rely on in-person conversations at a branch, talking to a live agent on the phone is favored across the board – highlighting the importance of channels that are convenient and easily accessible during the consideration phase of the buyer journey.  

During times of financial hardship, consumers want to know that their bank has their back – and will help them save.  

The COVID-19 pandemic has taken a toll on the national economy, leaving many Americans struggling financially. When considering a bank, response during times of financial hardship is the number one factor influencing consumers’ decisions to sign up, outweighing a bank’s investment in social issues or support of local and small businesses. 

Money-conscious consumers also prioritize flexibility and seek smarter ways to save when choosing a bank, favoring low minimum deposit and balance requirements (24%), loyalty programs and incentives (20%), and high interest rates (19%) above conveniences like online banking tools (11%) and an extensive ATM network (3%).  

Want access to more consumer insights from Fluent? Check out the full collection of Fluent Pulse data here.

*This survey was conducted online via Fluent’s portfolio of owned and operated media properties. Data was self-reported by 35,877 U.S. adults from July 8 – 9, 2021. Results are specific to the Fluent audience and not reflective of the general U.S. Population.