The new checking account paradigm: Staying profitable in today’s competitive environment
The staid checking account has come a long way in just the past few years. Remote deposit capture, mobile banking, social payments, prepaid debit cards and other new products are transforming how consumers use their checking accounts. To ensure your checking account options are enticing enough to attract and retain consumers – while maintaining profitability – it’s time to embrace the new checking account paradigm.
With many nonbank providers offering prepaid and mobile accounts, financial institutions are grappling with how to position or reposition product lines to remain viable in today’s competitive checking account environment. The Point talked to Fabio Biasella, vice president of strategic thought leadership for Raddon, Fiserv, about new research on checking demand and the growing influence of nonbank alternatives.
What are the current trends in checking usage?
The number of checks written is down by more than half in the last decade, while at the same time prepaid cards have grown by 15.8 percent, according to new National Consumer Research from Raddon. Half of all younger consumers use one of the six largest U.S. banks as their primary financial institutions (PFI), while older generations are least likely to use major bank as their PFIs. Forty-four percent of millennials view mobile banking as a checking account value driver, compared to just 13 percent of baby boomers.