Is it “game over” for mid-size banks and credit unions when it comes to checking accounts? Are the threats from deposit displacement, P2P providers, Amazon, and megabanks insurmountable? No.
Despite the prevalence of free checking accounts, many consumers express interest in switching to that hypothetical Amazon-offered bundled checking account we discussed earlier in this report. Even with the prospect of paying a $5 to $10 monthly fee, nearly one in four Old Millennials said they would switch accounts if their primary FI offered a checking account bundled with value-added services, and about half said they might switch.
Here’s some good news for banks and credit unions: Among the 31% of Millennials (young and old combined) who aren’t willing to switch accounts, very few (roughly 10%) cited an unwillingness to do more business with their primary institution as a reason why.
In addition, consumers show a strong interest in purchasing those value-added services — cell phone damage protection, identity theft protection, travel insurance, etc. — from banks and credit unions. Three in 10 Young Millennials and four in 10 Old Millennials said they would purchase these services from an FI, a larger percentage than said they’d buy them from the big tech titans like PayPal, Google, and Facebook.
Mid-size banks and credit unions are faced with a strategic dilemma: how to protect and rejuvenate their checking account product strategies in the face of deposit displacement and threats from non-traditional competitors.
Want to learn how? Your first step is to download Reinventing Checking Accounts today.