Consumers Look at Security First, Costs Second When Opening a Bank Account
DEK: When it comes to opening a bank account, consumers know what they want: the security of their funds and data, followed by lower costs, according to PYMNTS Intelligence research.
After two years of persistent inflation and economic uncertainty, consumers have adopted a range of conservative attitudes across consumer products and services.
This includes seeking bargains more proactively online, shopping in low-cost shops for clothing or grocery items, and leveraging buy now, pay later (BNPL) plans to pay for appliances or leisure travel.
In the banking sector, some consumers are prioritizing lowering costs when choosing a financial institution (FI) with which to open a primary bank account.
Top Factors When Choosing a Bank
Nearly 12% of consumers surveyed in a PYMNTS Intelligence study reported that lower cost is the most influential factor when choosing where to open their primary bank account.
Overall, cost is the second-most attractive factor cited by consumers, only behind safety of money or personal information, In other words, cost trumps all other considerations named in the survey, including the quality of customer service or loyalty to that financial institution.
The survey found that national banks are the most used type of FI for bank accounts, with 45% of U.S. consumers with a primary bank account in one of these FIs.
However, a closer look at the data found that more consumers prefer switching to other types of institutions. Lower fees and access to better financial conditions are key factors when choosing a bank, especially if it is a digital bank, the study reported. This may help explain the migration from national bank accounts that focus more on customer service or network coverage than lower costs.
When it comest to the presence of local FIs, nearly 31% of consumers prefer to have their primary accounts at regional or local community banks, citing the convenience of proximity. As consumers prioritize cost over location and other factors, this preference may only partially offset a potential migration from local brands to FIs with a lower cost proposition.
Source: PYMNTS Intelligence Credit Unions and Community Banks Gain Credit Card Issuing Momentum, November 2023. N varies based on the features that would likely cause them to switch; N = 1,057: Consumers who have a primary credit card at a national bank, fielded Aug. 10, 2023 – Aug. 21, 2023
About the Study
“Credit Unions and Community Banks Gain Credit Card Issuing Momentum,” is a PYMNTS Intelligence and Elan Credit Card collaboration. The report examines the current state of play for consumer credit cards. It draws on insights from a survey conducted of 2,088 United States consumers to explore their evolving preferences surrounding card issuers.
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