How Engaged Customers Lead to Higher Deposits and Lasting Relationships
Deposits are the lifeblood of financial institutions. However, they are falling across a majority of financial institutions. In fact, S&P Global reported the U.S. banking industry's deposits contracted 4.8% year over year. From catastrophic bank runs to consumers flocking to new accounts from technology industry giants, what’s key to reversing the trend?
A complex set of factors are making it harder than ever to grow and retain deposits. Coupled with increasing demands from consumers for personalized and engaging digital experiences, financial institutions may continue to see declining deposits unless they take action. In fact, today’s digital-first consumers are more willing to switch to a new provider than ever before. Half of consumers have opened a new bank account or considered switching financial providers within the last 6 months, according to MX research.
MX looked closely at the behavior of more than 10 million consumers over the past 12 months and found that engagement with financial wellness tools is key to growing and retaining deposits. In fact, the data shows consumers who actively engaged with their digital financial solution consistently outperformed non-engaged users.
Consumers who regularly engaged with MX’s personal financial management (PFM) features — specifically creating and using budgets — within their mobile banking experiences had the highest deposit levels and grew those balances during the year, even as deposit balances fell for those who didn’t engage as often.
While growing their deposit balances, these users also managed their credit card debt more effectively than others, even during a period of high inflation and increasing consumer debt levels.
These are great examples of how using MX’s financial wellness widgets and tools enable consumers to better understand and manage their finances. With the insights generated from these tools, consumers are able to spend less than they earn, build up their savings, and avoid debt — all of which drive improved financial wellness for the consumer and in turn, better outcomes for the financial institution.
In addition, our data shows the first 30 days of onboarding a consumer can influence and build long-term digital engagement.
Just look at the stats:
Consumers who interact with MX’s PFM tools at least one day during their first month are 176% more likely to be digitally engaged after one year than those who don’t.
Consumers who establish direct deposit during the first 30 days of their banking relationship are 76% more likely to be digitally engaged a year later than those without direct deposit.
Consumers who connect at least one or more external financial accounts are 48% more likely to be digitally active a year later than those who don’t.
Consumers who make at least one mobile transfer during their first month are
195% more likely to be digitally engaged a year later than those who don’t.
Consumers who log in at least once during their first month are 26% more likely to be digitally engaged after a year.
For those who log in on at least four separate days during their first month, they are 550% more likely to still be active a year later.
“While we don’t have specific details about each financial institution’s onboarding experience, the data clearly shows that efforts to educate and engage consumers are critical to long-term success,” said Clint Johnson, Director of Professional Services at MX. “By focusing on customer outcomes and creating personalized, intuitive experiences from Day 1 of the relationship, financial institutions can not only maintain deposits but grow them — even in an increasingly challenging market.”
Deliver personalized data- driven insights to increase customer engagement
Build stronger customer relationships with actionable insights and outcomes
Increase deposits and create long- term loyalty with superior mobile and digital money experiences
MX Insights delivers a combination of personal financial management, predictive financial guidance, and financial wellness capabilities that helps organizations to translate data into actionable insights. It enables organizations to gain more value from their data, power the best experiences, and improve engagement so their consumers can become financially strong.
MX offers a fully-featured digital banking platform that empowers financial institutions and fintechs to deliver data-driven, contextual, and personalized experiences.
MX Personal Financial Management simplifies consumer interactions with their finances from connecting all their accounts in one place, to best-in-class digital money management and notification capabilities.
Explore how MX can help you get the most from financial data and build better money experiences for consumers.