Switching banks is difficult for most consumers. Why? Completing the switching process requires untangling automated transactions (e.g., ACH’s, online bill pay) and re-establishing those transactions at a new bank or credit union. For many consumers, the process is too time-consuming. Others are concerned they’ll miss an important payment. Consumers that live paycheck-to-paycheck don’t have enough reserves to fund both accounts for as long as it takes to switch everything. The result? Inertia.
That’s why it takes a lot to get people to switch — which is both good and bad. Given how reticent people are to go through the hassle of switching, do you know why people switch from your institution? Three surveys fielded on FindABetterBank since September 2012 has asked respondents why they’re shopping for new checking accounts.
Looking at the data, three trends emerge about the composition of checking account shoppers.
1. The proportion of shoppers who are unhappy with their current bank continues to decline. In September 2012, 25% of respondents said they’re in the market because they’re paying too much in fees, compared to 20% in April 2014. Media attention during the financial crisis caused consumers to obsess over fees. Without the media fanning the flames, fewer respondents are citing high fees as a motivation to switch.
2. One in five shoppers don’t currently have checking accounts. The proportion of consumers getting their first checking account has been fairly consistent across the three surveys. Not surprisingly, many of these shoppers are under 30. We have found that “new-to-banking” shoppers are very sensitive to branch locations and can be easily confused when shopping online. Effortless shopping experiences, easy access to location information, very visible phone numbers and live chat options help win over these newly minted checking consumers.
3. Approximately 20% of active checking account shoppers have households in transition. Overall, more people move during the summertime, but the three surveys had similar proportions of movers. This is a big segment of the active market at any given time. When movers are shopping online, one of their biggest questions is branch and ATM locations, yet many banks and credit unions make it difficult to find this information — static links at the top of pages aren’t enough. Place links or locator widgets in or close to the main content area of checking category, product, fee and rate pages.