By Mark Gibson
Common wisdom states that a banking relationship begins with a checking account. If that wisdom is true, a seismic shift is occurring in the banking industry. The vast majority of checking accounts are being opened by very large institutions. This has potentially large implications for future market share and revenue streams in the industry. Bank leaders benefit when they understand the checking account landscape and put proactive plans in place to reverse this trend.
The most recent data from Cornerstone Advisors indicates that digital banks/fintech firms, megabanks and large regional banks (over $100 billion in assets) collectively opened 87 percent of all checking accounts in 2024. Banks under $100 billion accounted for only 4 percent of total accounts opened.
There are several important drivers of this performance. Larger institutions have higher brand awareness, which puts them in the “consideration set” for many consumers. After all, if they haven’t heard of you, they are not going to buy from you. Second, large institutions and fintech firms have much larger marketing budgets to fund advertising and attractive cash incentives. For instance, Chase spent $4.59 billion on marketing in 2023, up 17 percent over the previous year. Finally, fintech firms have invested in innovative products. As a result, brand such as Chime and Sofi have garnered millions of new accounts in the past few years.
Is it ‘the product’?
This raises an important strategic question: Is the checking account still the basis for creating new consumer banking relationships?
The short answer is – yes. Consumers overwhelmingly define their primary institution as the one where they have their primary checking account. The longer answer is that the checking account is really no longer a checking account. For many consumers, the checking account is a storage vehicle, while payment tools such as Venmo, Apple Pay, PayPal and others are their daily go-to for routine transactions. In fact, paper checks now account for less than 4 percent of all transactions, and many consumers do not even know how to write one.
Some banks have addressed this new reality with categories of accounts such as “spend,” “save” and “invest.” Others have incorporated tools such as Apple Pay and Zelle into their checking products. This is a positive way to remain relevant to changing consumer needs and expectations.
Nearly one-third of banks use cash incentives instead of, or in addition to, offering products with unique, attractive benefits. However, only 27 percent of consumers who recently switched cited the cash incentive as the reason for selecting their new institution, according to ProSight (formerly BAI Banking Outlook, 2025). Cash incentives may work, but by themselves they are not sufficient, and they can be very expensive.
You might be thinking that these new approaches to product design sound wonderful, but the lack of flexibility of your core system prevents you from doing anything innovative. While it is true that core systems that don’t easily allow the addition of APIs do restrict your choices, the fact is that many ‘innovations’ that uniquely meet consumer needs can be accommodated by existing core capabilities. The key is doing the research to understand what those unmet consumer needs are and then working with your operations team and core provider to identify what you can do.
“We re-branded a core checking product to highlight features that addressed customer’s hot buttons, and then led with that feature in our advertising,” said Larissa Murphy, advertising and content Manager at First Commonwealth Bank. “We saw new account volume more than double within less than a year.”
However, more competitive products alone will not win this battle. For instance, any institution that has invested in a new, enhanced online account opening system is likely to have experienced a similar situation. Better products or systems are not like “Field of Dreams,” where Kevin Costner attracts thousands just by building a baseball field. The reality is that no one will know about your new product unless you effectively communicate it.
Telling the world about it
An important critical success factor is putting marketing dollars behind your product so that people know about it. While banking is moving rapidly toward digital advertising, the most successful checking account banks often use television and direct mail to get their message across. It’s true that those traditional vehicles may be more expensive and more difficult to measure success, but it’s telling that even fintech firms rely heavily on them. Do they know something the rest of us do not? Large companies would not be using marketing channels that do not work. So the relevant question for community and regional banks is, “What is the right dollar amount and media mix for your institution?”
While many people think that marketing and marketing budgets are some sort of voodoo, they are not – they are actually math-based, just like the rest of banking. The challenge is that it is less familiar math to most bankers. For instance, what is a new checking customer worth? If you cannot answer that, you cannot determine how much you can afford to spend to attract one. And if you cannot answer that, you cannot come up with a marketing budget to attract 100 or 1,000 new customers.
It’s an enigma that financially driven bankers who calculate most other investments to the penny are willing to leave so much of the marketing equation to chance. Do we really think that Chase increased its marketing budget by 17 percent without facts and data indicating what the bank would get for it?
So, basing the checking acquisition marketing budget on facts and data is a necessary step. But it’s not enough.
Getting the message right
Most consumers don’t buy ‘banking products.’ Consumers are looking for solutions to problems. While the difference may be subtle, how you speak about your new product will make the difference between success and failure.
A critical element of this is: Who are you trying to attract? The reason for this is that different types of customers have very different needs and are trying to solve different problems. For instance, while a young person just starting out is trying to stretch their paycheck, an older empty nester is trying to move money to their children and grandchildren. In order for a campaign to be successful, determine who you are speaking to and ensure you are hitting their ‘hot buttons.’
Another common problem in checking advertising is focusing on a need to communicate ‘all six benefits or features.’ This violates the immutable advertising law of keeping things simple. For instance, have you ever driven down the road and seen a billboard with 30 words? You are lucky to know who the sponsor was, let alone what the message was. The same principle applies to all other media channels. Determine what your primary message is and focus on it. If you are successful in doing that, you will have other places like a website landing page or a flyer in the branch to more fully explain the product and its full range of benefits.
The medium is the message
This phrase was coined by the communication theorist Marshall McLuhan to explain that the way information is delivered (the medium) is just as important as the content of the message itself.
It is relevant here because the choice of media affects both the ROI of the marketing program and its ability to reach the right people. Marketing ROI is driven essentially by two things: the response rate and the profitability of the new customer or account. The medium impacts both of those. Let’s focus on the response rate first.
If your marketing team takes the time to understand the media habits of the customer group you are trying to reach, they will be able to put marketing dollars into the media your prospects are using and not in media that other people are viewing. This drives up response rate and reduces overall media expense, both of which significantly increase ROI.
The second component is related – reaching the audience you intended to at the profitability level you projected. Remember, you’ve created a message that is tailored to the needs and hot buttons of a specific group of people. Now, you need to get that message in front of them with as little waste as possible (other people see it because you pay for that with little return).
By selecting the right mix of media and measuring and adjusting the mix based on results, you increase the chances of attracting customers with product balance levels and the profitability you intended.
Beating ‘the 4 percent’
“We can’t go head to head with the giant banks and fintech firms,” some community bankers may think. However, there are many successful community banks competing in the consumer checking space. Sun Tzu, the ancient military strategist, had sound advice for battling with much larger foes. “Fight the enemy where they are not.” In other words, do not compete head to head. Leverage your strengths and their weaknesses to meet the customer’s needs better than your larger competitors are able to.
Effectively answering the questions of, “Who is our target customer?,” “What unique value can we offer them?” and “How are we going to efficiently reach them?” will go a long way toward banks implementing successful checking acquisition programs that handily beat the 4 percent benchmark.
Mark Gibson is a senior consulting associate at Capital Performance Group, a strategic consulting firm that helps financial institutions maximize the ROI of their marketing efforts. He can also be reached on LinkedIn.
