Why the First 30 Days of a Banking Relationship Matter
Today’s consumers have more choice than ever before when it comes to where they store and manage their money. And, it’s not uncommon for the average consumer to have more than 5 accounts with various financial providers as a result. In fact, our research of more than 1,000 U.S. adults found that nearly 1 in 4 consumers (23%) are opening new financial accounts at least once per year or more often. Among Gen Z, this jumps to 36% of respondents who say they are opening new accounts at least once per year.
Consumers have little patience for financial providers who cannot meet their needs with fast, secure, and personalized digital experiences. While they may not always take steps to close an account that dissatisfies, you’ll be able to tell which accounts simply exist but remain unused. So how do you make sure your financial institution or fintech is the one they turn to most often?
MX took a deep dive into the data from more than 10 million consumers over the past 12 months to identify how to drive the right experiences and touchpoints to create lasting engagement and relationships — and ultimately, grow and maintain deposits.
It all comes down to the first 30 days.
“By focusing on customer outcomes and creating personalized, intuitive experiences from Day 1 of the relationship, financial institutions can not only maintain deposits but grow them — even in an increasingly challenging market.” —Clint Johnson, Director of Professional Services at MX.
Here are 5 actionable steps that banks, credit unions, fintechs, and other financial providers can take during the first 30 days of a new consumer account to build a long-term relationship and create lasting engagement.
1. Activate with Account Aggregation
With multiple disparate financial accounts across various banks, credit unions, and other providers, it’s easy for consumers to lose sight of their full financial picture. As a result, 44% of U.S. adults say they have used digital tools to bring different financial accounts into one view. This account aggregation allows them to consolidate their finances into a single view rather than needing to login to multiple accounts to see what’s going on with their finances.
And, wherever that single view lives is where they will engage most often. Our data shows consumers who connect at least one or more external financial accounts are 48% more likely to be digitally active a year later than those who don’t.
Financial providers should educate consumers early on how they can connect their external accounts and make it easy for them to do so. For instance, consider the flip side of our consumer research — 56% of consumers have NOT used a tool to bring different accounts into one view. This is an opportunity to drive engagement by being the first financial institution to help them not only understand the value of account aggregation but also how to securely and seamlessly add their accounts.
2. Drive for Direct Deposit
Direct deposits create an immediate attachment for consumers to the bank where this direct deposit lives. That said — having a direct deposit with a particular institution doesn’t guarantee that institution will be the consumer’s primary go-to account. In fact, our data shows very few U.S. consumers (5%) defined a primary financial relationship as where they deposit most of their money.
That said, establishing a direct deposit with a new financial account in the first 30 days can create higher engagement for the long-term. Our data shows consumers who do this are 76% more likely to be digitally engaged a year later than those without direct deposit.
So, how do you get them to do this? The reality is most consumers likely don’t want to go through the hassle of changing their direct deposit very often. To encourage taking action, financial providers should look at incentives that would make consumers want to switch — and they have to make the process easy and secure.
3. Encourage Frequent Logins
Consumers who log in at least once during their first month are 26% more likely to be digitally engaged after a year. Those who log in on at least four separate days during their first month are 550% more likely to still be active a year later. The trick is to ensure your digital or mobile banking experience provides instant and repeated value for consumers. This means providing personalized financial insights and easy-to-use personal financial management (PFM) tools that help consumers meet their financial needs.
Consumers have less patience than ever for sub-par experiences and overly complicated processes. Minimizing the steps — or searching — required to find information or take action is essential to driving high adoption and engagement. The longer it takes for customers to find what they need, the more likely they are to abandon the experience — and not come back. Institutions with the highest adoption rates place the most sought-after information and common actions in multiple prominent locations within the digital user experience.
4. Make Mobile Transfers Easy
Finally, consumers who make at least one mobile transfer during their first month are 195% more likely to be digitally engaged a year later than those who don’t. To encourage consumers to use your mobile transfer options, focus on delivering a safe, easy, and fast option for transfers.
5. Enable Embedded Personal Financial Management Tools
The more consumers know about their finances, the better they can manage them. Our research continually shows the majority of consumers agree they want their financial provider to help them better manage their finances (57%) and believe financial providers have a responsibility to teach them to be financially strong (54%).
And, our data shows those who deliver on these consumer expectations with PFM tools that meet their needs can drive higher engagement and success. In fact, consumers who interact with PFM tools at least one day during their first month are 176% more likely to be digitally engaged after one year than those who don’t.
Conclusion: Building Lasting Relationships from the Beginning
In today’s financial landscape, consumers have countless options at their fingertips and aren’t afraid to switch to a new provider if their needs aren’t being met. Our data makes it clear that the first days of a new banking relationship can have lasting impacts on consumer engagement.
Banks and credit unions who are able to create a valuable onboarding experience that emphasizes connectivity, personalization, ease, and convenience will reap the benefits. But it’s not enough to simply offer the tools. These five areas of opportunity need to be fully integrated into the customer onboarding process. How often does a consumer open a new bank account, get their login details, and simply have to figure it out on their own?
To be most effective, the account opening process needs to include education and training from the moment they receive their new account credentials to ensure they can get the most value from their experience. This should include training from in-branch employees to showcase key features to customers in person, and provide proactive emails, texts, and direct mail to remind them of features they can leverage to make managing their finances easier.
With a proactive approach to educating consumers on how to get the most out of their banking experience, coupled with personalized, easy-to-use tools that enable them to take these five actions within the first 30 days, financial providers can drive higher engagement from the beginning that results in increased customer loyalty, retention, and ultimately, deposits.
“To win and keep customers in 2024, the money experience needs to connect customers to their data in a way that enhances their financial lives. It needs to be personalized. It needs to be intelligent. And, it needs to be actionable.” —How to Keep Consumers from Breaking Up with Banks