US Banking Experience Market Report 2023

Overview

• What you need to know
• This Report looks at the following areas
• Market context

Executive Summary

• Top takeaways
• Younger consumers more likely to seek rewards and financial advice when choosing new providers
  • Figure 1: Importance of rewards and financial advice when choosing provider, by generation, 2022
• • Figure 2: Vitality Money, 2023
• 68% of consumers want support and financial advice from their banks, yet just 45% have received it
  • Figure 3: Importance of financial advice from bank, by household income, 2022
• • Figure 4: Fidelity paid Facebook ad, 2023
  • Figure 5: SoFi financial tips email, 2022
• Just 7% of financially struggling consumers use their bank’s advisory services
  • Figure 6: Use of bank’s financial advisor, by financial situation, 2022
• • Figure 7: Bank of America CDFI directory, 2023
• Market overview
  • Figure 8: The Banking Experience outlook, 2023-27
• Opportunities and challenges
• The struggling fintech sector presents a prime growth opportunity for incumbents
• Standing out in a rate-focused world through relatable messaging
  • Figure 9: Most important factors in choosing a financial provider, 2022
• • Figure 10: Marcus online savings account paid Facebook ad, 2023
• Key consumer insights
• Overdraft and non-sufficient funds fees remain a severe financial burden on financially struggling minority consumers
  • Figure 11: Consumers charged an overdraft or NSF fee in the past year, by financial situation and race/ethnicity, 2022
• • Figure 12: Earnings disparities, by race and ethnicity, 2020
  • Figure 13: Citibank desktop display ad, 2022
  • Figure 14: Bank of America SafeBalance checking account email, 2022
• Gen Z and Millennials are most swayed by sign-up bonuses and rewards when considering a banking switch
  • Figure 15: Reasons to switch financial providers, by generation, 2022
• • Figure 16: Chase Southwest Rapid Rewards card email, 2023

Market Size

• Total number of US banks remains in freefall
  • Figure 17: Total number of US insured commercial banks, 2008-2022
• Chase and Bank of America top the list of largest US banks by assets
  • Figure 18: US chartered commercial banks with consolidated assets of $300 million or more, 2022

Market Factors

• Banks cut mortgage lending staff amid struggling housing market
• Personal savings rate rebounds to 3.4%
  • Figure 19: Personal saving rate, seasonally adjusted, 2015-22
  • Figure 20: Net percentage of domestic banks tightening standards for credit card loans, quarterly, Q1 2019-Q4 2022
• Branch closures on pace to slow down after pandemic-era record closures
  • Figure 21: Total number of US insured commercial bank branches, 2008-21
  • Figure 22: Importance of in-branch banking, by residence in urban, suburban, and rural locations, 2022

Competitive Strategies and Market Opportunities

• TD stresses overdraft protection along with an appealing sign-up bonus
  • Figure 23: TD Bank checking account paid Facebook ad, 2023
• Schwab makes financial planning more human by putting advisors at the forefront of its messaging
  • Figure 24: Charles Schwab financial consultancy ad, 2023
• Fifth Third announces new Early Pay feature aimed at expediting the tax refund process
  • Figure 25: Fifth Third Early Pay for tax refunds, 2023
  • Figure 26: US Bank and TurboTax partnership, 2023
• Dollar Bank encourages digital banking via a community-driven approach
  • Figure 27: Dollar Bank Facebook ad, 2023

The Banking Experience – Fast Facts

Use of Financial Institutions in the Past Year

• Commercial banks remain the most popular type of financial institution
  • Figure 28: Usage of financial institution in the past year, 2022
• Digital bank usage ranks among the highest for financial struggling consumers
  • Figure 29: Usage of financial institutions in the past year, by financial situation, 2022

Total Number of Bank Accounts

• Most consumers have at least two bank accounts
  • Figure 30: Total number of bank accounts, 2022
• Older consumers are more likely to diversify their funds and accounts
  • Figure 31: Total number of bank accounts, by age, 2022
  • Figure 32: Total number of bank accounts, by household income, 2022

Length of Primary Account Ownership

• A third of consumers have held their primary bank account for over 16 years
  • Figure 33: Length of primary account ownership, 2022
• 18-24 year olds are a prime segment for FIs to establish early banking relationships with
  • Figure 34: Length of primary account ownership, by age, 2022

Reasons for Visiting a Physical Branch

• Over half of consumers visit physical bank branches to use an ATM
  • Figure 35: Reasons for visiting a physical branch, 2022
• Younger Millennials most likely to visit their FI’s financial advisor
  • Figure 36: Use of bank’s financial advisor, by generation, 2022

Most Important Factors in Choosing Financial Providers

• Customer service is top of mind for prospects seeking a new provider
  • Figure 37: Most important factors in choosing a financial provider, 2022
• 40% of Gen Z considers savings rates when choosing a new provider
  • Figure 38: Importance of savings rates when choosing provider, by generation, 2022
• Financially struggling consumers least likely to consider financial advice when seeking a new provider
  • Figure 39: Importance of financial advice when choosing provider, by financial situation, 2022

Reasons to Switch Financial Providers

• Fees, customer service, and rates remain the trifecta most likely to prompt switching banks
  • Figure 40: Reasons to switch financial providers, 2022
  • Figure 41: Capital One 360 Checking account, 2023

Attitudes toward Banks

• Nine in 10 consumers are satisfied with their current bank(s)
  • Figure 42: Bank satisfaction and likelihood of making recommendations, 2020 and 2022
• Over 90% of consumers prefer to bank at FIs with well-established reputations
  • Figure 43: Importance of reputation in banking, by generation, 2022
• • Figure 44: Use of traditional banks and neobanks, by generation, 2022
• 70% of consumers would consider opening a new account if the incentive was appealing enough
  • Figure 45: Likelihood of signing up for a new bank account if incentives are offered, by generation, 2022
• • Figure 46: Discover checking account email, 2023

Appendix – Data Sources and Abbreviations

• Data sources
• Consumer survey data
• Marketing creative
• Abbreviations and terms
• Abbreviations