As all financial institutions have experienced, the retention and quality of digitally originated relationships significantly lag those originated in the branch. Curinos’ benchmarking of new-to-bank checking relationships in Q1 2023 revealed a 35% gap in retention after 12 months. And that doesn’t take into account the lower average balances of digital accounts.
A telling predicter of the problem is lack of early funding – more than half the negative impact is because providers fail to achieve funding in the first month. This occurs about half the time with digital relationships, compared with only 5% for those originated in branch, and the ensuing differences in retention are stark. For funding tiers above $100, on the other hand, the gap in retention rates between digital and branch is only about 14% (see chart).
Possible remedy? Ensure the customer takes the important step of locking in continued funding when the account is set up. This could include streamlined funding experiences, direct deposit switching and in-app messaging. As some of the best-in-class providers have discovered, this could also include partnering with vendors that can support direct-deposit journeys that are completely digital.
The most telling predicter of relationship attrition is lack of early funding.
Digital Relationship Retention
by Initial Funding Tier
Branch Relationship Retention
by Initial Funding Tier
Source: Curinos Digital Benchmarking; 1Q2023 Origination Vintage
