Primary Relationships or Bust

Banker shaking hands with customer across desk

By Ryan Harbry

Customer loyalty is essential in every industry under the sun. In banking, it matters even more than most industries because not only do unloyal customers represent a missed opportunity for revenue; they have the potential to cost more than they are bringing in — creating a drag on earnings.

And, if we’re honest, banking customers don’t exactly exemplify unwavering fidelity. Few would argue that consumers have the same degree of loyalty to their bank or credit union as they do with their hairstylist, for example. (See the “Seinfeld” episode The Barber and imagine if that could be made about our industry.) 2021 research published by the Cornerstone Advisors indicates that 28% of Gen Z, 43% of Millennials, 35% of Gen X, and 33% of Baby Boomers have checking accounts with two or more financial institutions. 

That’s 34% of people ages 21-74, showing that many people are cheating on their primary financial institution with others.

Cultivating primary and engaged relationships is both an art and a science. It requires great people in the branches, sophisticated digital experiences, and products designed to foster engagement and incent behavior.


Create a Fintech Revenue Engine

When these pillars are in place, a solid foundation is established. You can build a healthy customer base where the risk of unprofitability is largely mitigated. To the extent that you fall short in establishing primary relationships, your bottom line inevitably contains an area that operates much like quicksand, or a black hole, where a material portion of your earnings find themselves siphoned into the deep dark abyss.

Please don’t underestimate the importance of well-designed products and what they mean to the financial success of your bank or credit union. When done well, they facilitate loyal and engaged customers and members while at the same time minimizing the quicksand that pulls down your earnings. When done poorly, quicksand and black holes only gain strength.  


Ryan Harbry is regional director of sales and consulting at StrategyCorps. For more information about how your financial institution can generate replacement revenue to subsidize unprofitable relationships, connect with him on LinkedIn, send him an email, or give him a call at 404.819.1438.