If you’re like most financial institutions, you have a common question in mind: Whom should I target to acquire new checking account holders? The answer: young people.
A recent study shows Millennials are most likely to be in the market for a new financial institution and checking account. Not surprisingly, they are also not satisfied with their current bank or credit union. So, they are looking to switch.
Where Do They Go — And Why?
Think Millennials are only mobile or digitally focused? Think again. Although about 15 percent of them are considering opening an online-only account, the vast majority (nearly 68 percent) still wants access to their cash. This is causing them to gravitate to larger financial institutions because of their extensive ATM networks. They also want the convenience of having a branch location nearby.
Checking Drives Revenue
Checking accounts are big drivers of revenue. But why? What makes them so profitable? Take a look at these numbers:
- $9 – average annual checking account service fee
- $81 – average annual insufficient funds fee per account holder
- $7 – average additional fees per account holder
- $50 – annual revenue per debit card swiped at least 12 times per month
As you can see, these little numbers add up very quickly, and when multiplied across your account holder base, they add exponentially to your revenue.
Checking Accounts: Stable, Yet Volatile
Stable yet volatile — it sounds oxymoronic, right? But consider the average age of checking account holders is 51. They’re at the age where they’re settled, they’re not looking to make big changes, including with their financial institutions. By contrast, 1 in 5 Millennials say they are in the market for a new primary financial institution.
So, checking accounts are very stable among older consumers and volatile among younger ones. This is why it’s important to acquire Millennials in the short-term by offering the conveniences they want and work to keep them over the long-term.