Curinos’ recent U.S. Shopper Study evaluated the choices consumers make in establishing a new primary banking relationship. Among other findings, it shows the continuing trend of fintech providers capturing a larger share of new primary bank relationships at the expense of traditional branch-based financial institutions (see chart).
Peeling the onion on this, we see a number of interesting dynamics at play. First, 32% of respondents are establishing a first-time primary bank relationship. Because the financial needs of these new-to-banking consumers are likely to be simple, many of them are choosing fintech providers. Another large percentage are choosing a national bank.
Second, among fintech providers, there’s churn. More than half of consumers leaving a fintech are choosing another one, which highlights the relative ease of starting a relationship with a fintech.
Third, “net change” in relationships favors fintechs as well as national and direct banks. All three are clearly adding more relationships than they’re losing, while regionals, community banks and credit unions are either static or declining.
Bottom line: This growing concentration of fintech relationships is a stiffening headwind for the thousands of financial institutions that make up the rest of the industry.
Consumer Switch Flow | by Bank Type | 2024
In new-to-bank relationships, fintechs and nationals continue to outpace other FIs. ​
Source(s): Curinos Customer Knowledge | US Shopper 2024 | Q47: In the last question, you said that you switched your primary checking account. At which financial institution from the list below did you hold the old primary checking account? | Q9: Of those selected, which do you consider to be your primary checking account (the bank you use the most today)?​
