By Mark Gibson
In today’s increasingly fragmented financial landscape, primacy has never been more valuable or more at risk. While a primary banking relationship remains the gateway to deeper product adoption and long-term profitability, consumer behaviors are shifting.
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The value of primacy
Bankers have intuitively understood that primary customers are more valuable to the institution, since they are likely to have deeper relationships, are less rate sensitive and stay longer. Primary customers generate eight times more fee revenue and hold 10 times more deposits than non-primary customers, according to Curinos. And while typical attrition rates are 15% each year, primary customers stay with their institution eight years on average, according to Kearney. Additionally, Accenture’s 2023 Global Banking Consumer Study found that North American consumers are likely to have 7.1 financial services products, and that 3 of them are at their “main bank.”
The evolving nature of primacy in a multi-bank world
Historically, bankers have equated a primary checking account with primary customers. As such, a retail banker would look at net checking account growth and attrition figures to determine the health of their checking business. Bank switching and account closures were critical metrics for checking primacy. The changing nature of consumer behavior and competition requires a rethink of how we achieve primacy and measure success.
The first change is that consumers are less likely to switch – close an account and open another – and more likely to add another checking account, or two or three. This makes it much more challenging to determine primacy, or the overall health of a bank’s checking portfolio. A recent study by Accenture found that 73% of consumers engage with banks other than their primary institution. Further reinforcing that trend, half of the consumers who opened a checking account in 2024 have two or more checking accounts, according to Ron Shevlin of Cornerstone.
If a customer uses two or three accounts for different purposes, the definition of and metrics associated with primacy evolve.
The other change is the nature of competition. Digital banks and fintech firms have launched checking accounts and are aggressively promoting them. These accounts are easy to open and easy to understand. Nearly 30% of Gen Z and Millennials consider a fintech firm or digital bank to be their primary checking provider, according to Shevlin, and many more have secondary relationships with these institutions. This also factors into how we think about primacy, since the consumer is engaged with and exposed to the products of these institutions as well as those of traditional banks.
Five tactics to drive primacy in 2025
Bankers are thinking differently about primacy, instituting strategies and tactics to optimize the number of new and existing customers who consider their institution primary.
The first is the very definition of ‘primary customer.’ While there is no standard definition, most institutions use a certain number of checking account transactions, or the presence of direct deposit or bill pay as de facto evidence of primacy. This approach has the advantage of simplicity but does not consider the dramatic variations in account usage across segments. To optimize primacy, a more nuanced and personalized can be taken. This can factor in such variables as the type of transaction (mortgage or rent payments) or the level of engagement (daily online banking usage).
The second tactic is treating primacy as an organizational strategic goal rather than a customer milestone. Bankers are increasingly correlating primacy with relationship depth, retention and revenue to build support for prioritizing primacy within the organization.
The third area of focus is evaluating the new account sales and onboarding process. Banks have learned that a cross-functional approach involving front-line sales, service, operations, marketing and product works best. Common predictors of primacy, such as online banking and bill pay enrollment, direct deposit and debit card use, are marketed and sold, but also monitored at the individual customer level so that tailored efforts can be made during the first two-month period to optimize usage. This requires a coordinated data-driven approach, and integrating a CRM and marketing automation into the process can also help scale the effort efficiently. The CRM can provide a banker insight into each customer’s evolving relationship, enabling bankers to customize their conversations with each customer. Additionally, the CRM can prompt the banker to make the call and keep track of the disposition following the call. Regarding marketing treatments, marketing automation performs the same role, allowing for automated customization of communications to each customer based on which services they have and have not yet signed up for.
Fourth, banks are building engagement using data and insight to deepen relationships. They are moving beyond simple cross-sell formulas (e.g., selling savings accounts to customers without one) and looking at transactional behavior and life stage to offer more relevant and personalized suggestions.
The final area of focus acknowledges that primacy is not ‘one and done,’ but an ongoing effort to encourage and monitor primacy, and intervene where necessary. This becomes particularly essential given that most customers have relationships with one or two other institutions. This can take the form of loyalty programs, which provide rewards or pricing benefits to primary customers. It can also involve monitoring early warning signs such as changes in key primacy behaviors or customer service events and taking proactive action to maintain satisfaction and loyalty. This also requires a data-driven approach and is aided by a CRM to streamline banker action and accountability.
Becoming the ‘go to’ bank
Primacy is just as important to financial institutions today as it has always been. Primary customers are more profitable, have longer tenure and have a much higher lifetime value. However, shifting consumer behavior and increased competition redefine what it means to be primary and how an institution achieves and maintains it. To win primacy, institutions are finding that the effort is a long-distance race rather than a sprint. They also realize that the definition of primacy and the actions necessary to achieve it vary by customer. As a result, primacy has become a strategic metric at a growing number of financial institutions, and an intentional cross-functional focus is being placed on maximizing the proportion of customers who rely on their primary bank for most of their financial needs.
Mark Gibson is co-leader of the sales and marketing practice 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 or at mark. gibson@capitalperform. com.
