What Influences Where Consumers Choose to Bank

In today's competitive landscape, driving business growth while maintaining a loyal and engaged customer base is more critical — and more difficult — than ever. MX’s latest survey of 1,000+ consumers dives into what influences their banking decisions.

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The Trust Imperative and the Personalization Factor

In today's competitive landscape, driving business growth while maintaining a loyal and engaged customer base is more critical — and more difficult — than ever. According to MX’s latest survey of 1,000+ consumers, more than half of respondents have either opened a new bank account (23%) or considered switching to a new bank (28%) in the past 6 months. 

This is an eye-opening statistic as banks, credit unions, and other financial providers face higher expectations and a lower tolerance for sub-par money experiences from consumers. Consumers are also more wary in the face of recent turmoil in the banking industry. One thing is clear — Trust is the key factor when it comes to where consumers decide to deposit their money and manage their finances.   

Customers need to be able to trust financial institutions and fintechs to keep their money safe, to protect their personal data, and to deliver reliable services that help them manage and use their money responsibly. However, trust in financial services is hard won and fragile. —A Time for Trust: The Consumer Money Experience

Bank Experience in Past 6 Months

Why the switch? Of those who have opened a new bank account, the top reasons for doing so were: better service (36%), higher savings rate (22%), more convenient (10%), and lower interest rate (10%). 

Why Consumers Have Switched Bank Accounts

Banking on Trust

Trust remains the top factor for consumers in choosing a financial services provider. More than half (58%) ranked the level of trust they feel regarding a provider as one of the most important factors, followed by how securely they protect their personal financial data (53%). 

At the same time, consumers again turned to trust when asked what factor is most important in determining where they choose to deposit their money. Thirty-five percent of respondents say the top factor is a provider trusted to keep their information and money safe. 

So who do consumers trust most? When asked which organization they would trust MOST to securely manage their financial data, national banks (50%) are the most trusted, followed by credit unions (19%) and local or regional banks (10%). The good news is that the majority (78%) of consumers agree they trust their primary financial service provider with their financial data. 

On the other hand, only 3% said they would trust tech companies, such as Apple, Google, and Amazon, the most to securely manage their financial data. Among Gen Z, this jumps to 5% but it is still a small minority. And, despite the early influx of deposits to Apple’s new savings account, 38% of consumers say it is unlikely they would leverage a technology company to manage their finances or hold their money. Only 8% of consumers say they already have a financial account with a technology company. 

Top Factors when Choosing a Financial Services Provider

Trust also appears to be on the rise. Forty-four percent of respondents agree they trust their financial providers MORE than they did 6 months ago. And, 44% of consumers agree they are confident in the current state of our American banking system. In addition, 61% of consumers agree they believe that financial providers have their best interest at heart — this is a significant increase from August 2022 when just 44% agreed with this statement.  

Men More Trusting of Financial Providers than Women

Sixty-six percent of consumers also agree they trust financial providers to do the right thing. But what does the right thing actually mean? The basic definition of doing the right thing means “to act or behave correctly, appropriately, or with the best intentions.” For financial services, MX believes we have a responsibility, and even a moral imperative, to improve today’s money experience — helping consumers better understand their finances and empowering them to be financially stronger. 

When considering other top factors that influence which financial services providers consumers choose to use, financial institutions and fintechs should focus on delivering secure, personalized money experiences.

Protecting Consumers from Fraud and Other Security Risks 

Fraud, data breaches, and scams have reached all-time highs with no signs of slowing down. Seventy-two percent of consumers agree fraud is one of their biggest concerns. Our research also found that 28% of consumers say they have been a victim of fraudulent transactions on a financial account in the past 2 years. 

Consumers need a trusted partner to help protect them from fraud and other security risks. Fortunately, 74% of consumers say they trust their financial providers to do so. This is a marked increase from 67% when consumers were asked this same question in August 2022. To add to this: 

  • 84% of consumers agree they expect their financial provider to proactively alert them when something looks suspicious. 
  • 51% of consumers agree that financial providers do enough to protect consumers from fraud and other security risks. 

Consumers Want Financial Providers to do More

Our research shows that financial providers are living up to the trust and expectations of consumers. For those who have been the victim of fraudulent transactions in the past 2 years, the majority (52%) say their financial provider proactively alerted them to a suspicious transaction. 

We’re on the right track but there is still room to grow. Another 37% of those who have experienced fraudulent transactions say they noticed it in their transaction history while 7% said they were unaware of a fraudulent charge until they received their statement. 

Delivering the Best Money Experience

Looking more broadly, consumers want a financial provider who takes a proactive role in delivering personalized experiences, proactive notifications, and customized insights. Let’s take a look at what this latest survey of 1,000+ consumers reveals as top expectations from consumers: 

Help Me Reach My Financial Goals 

More than half of consumers agree they want their financial provider to help them better manage their finances (57%) and believe financial providers have a responsibility to teach them to be financially strong (54%). This is a sizable increase from last time we asked this question. Just 6 months ago, only 39% agreed with this statement. 

While this sentiment has increased, those who feel their financial providers do enough to support their financial needs has decreased — 33% of consumers agree they feel financial providers don’t do enough to support their financial needs, an increase from 1 in 4 consumers previously. Among Millennials (45%) and Gen X (42%), this rises to nearly half of consumers who don’t feel providers do enough. 

So how can financial providers ensure they’re meeting the mark in terms of supporting the financial needs of their customers and members? Personalization is key. Half of consumers expect financial providers to deliver personalized offers for tools, products, and services to help them reach their financial goals. Other top expectations for personalization include: 

  • Discounts or offers for brands that I use (44%)
  • Customized insights in the online or app experience to help me understand my spending (43%) 
  • Proactive notifications and recommendations to help me better manage money (42%)
  • Ability to personalize a card, such as choose my displayed name, etc. (36%)
  • Automated budgeting and analysis of my spending (31%)

Top Personalization Expectations

Proactively Tell Me What I Should Know

While nearly half expect proactive notifications and recommendations, the majority demand proactive alerts when it comes to issues they need to know about. Seventy-nine percent of respondents expect their financial provider to proactively alert them to issues related to their finances (such as upcoming payments due, low account balances, etc.). 

This shows an important distinction between “nice to have” personalization features that enhance the money experience and “must have” functionality that can create lasting engagement and loyalty. Consumers are looking for someone to help them stay on top of their finances. When asked what question is most important for them to be able to answer when managing their finances, the top questions to answer are: 

  • How much can I put towards debt or savings? 22%
  • Am I spending more than I should? 21%
  • How can I cut expenses? 17%

Top Questions Consumers Want Help Answering

Provide Me with Cutting-Edge Products, aka Make Things Easier

More than half (54%) of consumers agree they believe their financial provider offers cutting-edge features and products. However, at the same time, 47% agree they believe their financial provider should do more to be innovative. But what does that look like? 

While this survey doesn’t dive into what types of innovations consumers are looking for, it did reveal a significant opportunity to make things easier for consumers:

  • 54% of respondents say it’s easier to open a new financial account than set up a new gym membership. 
  • 61% of consumers say it’s easier to sign up for a rewards program at their favorite store than to apply for a new credit card.
  • 62% of consumers say it’s easier to renew their driver’s license or ID than apply for a loan. 

Which is Easier? Consumers Weigh in...

Give Me Control of My Financial Data

Consumers continue to want control over their financial data. Eighty-two percent of consumers agree they own their financial data and should be able to control who has access to it. In addition, 78% of consumers agree they expect to be able to see all of their financial data in one place. This is a considerable increase from Jan. 2023 where 64% said the same. 

However, there is still work to be done to make consumer-permissioned data sharing the norm instead of an expectation. Half of consumers (52%) agree they aren’t sure what companies or financial providers have access to their financial data. 

Exchanging Financial Data for Personalized Experiences

Consumers are prepared to share more information about themselves in exchange for a more personalized experience. Most consumers do this every day — sharing their birthdate to get a free dessert at their favorite restaurant, providing an email address during the check-out process to get coupons, or signing up for rewards using their mobile phone number at a retailer. 

In fact, 39% of consumers say they are likely to provide access to their financial transaction history to receive more personalized offers and services from a retailer or restaurant that they frequently visit. Among Gen Z (44%), Millennials (53%), and Gen X (46%), this is even higher. By comparison, only 14% of Baby Boomers said they would be likely to provide access to their financial transaction history. Interestingly, men are nearly twice more likely to share — 51% of men would provide access to their financial transaction history to receive more personalized offers and services compared to 28% of women. 

When asked how much data they would be willing to share, consumers are still considering where to draw the line. Fourteen percent said they would share all of it, while the largest response group (34%) said they would only share what’s absolutely necessary. 

Sharing Financial Data for a More Personalized Experience

As consumers become more open to sharing their financial data with retailers and restaurants, financial providers need to increasingly pay attention to how they are safeguarding who has access to this data and ensuring consumers have the ability to grant and revoke access on their terms. 

The Rise of — and Incentive for — Pay by Bank

In addition to sharing financial data in order to gain a more personalized experience from retailers and restaurants, consumers are also more likely to embrace new payment methods to gain added incentives. When asked how likely they would be to pay directly from a checking account rather than using a credit or debit card if there was an incentive, 55% said it was likely. 

Likelihood of Using Pay by Bank

Pay by bank, also called “account-to-account payments” or “bank-based payments”, can offer greater security and peace of mind for consumers. For financial providers, it creates increased stickiness and engagement with consumers. And many merchants are keen to tap into this rising payment method to avoid fees. However, the trick will be in convincing consumers to leverage this less familiar payment method instead of relying on old habits. In fact, 78% of consumers agree they prefer to pay for things the way they are used to. 

So how do we get consumers to make the switch? When asked in which cases they would be likely to add a personal checking account as a payment method, consumers were split into 3 primary camps overall: 

  • If there was a promotion or added benefit (37%)
  • For retailers where they shop frequently (36%)
  • Never (36%)

When Would you Add a Checking Account?

However, younger consumers may be more willing to leverage Pay by Bank. Sixty-two percent of Baby Boomers said “never” compared to an average of just 28% across all other generations. 

Separately — and encouragingly, 15% said they would do so for any online retailer that provided the option. In addition, top factors most likely to determine their preferred payment method include:

  • Ease of use (42%) 
  • Security (32%) 
  • Ability to earn rewards or points (19%)

Top Factors Determining Preferred Payment Methods

What’s Next? Consumers Split on Role of Financial Providers

As we look to the future, financial services providers face an interesting inflection point — are they just a place to store money or are they a true partner in helping consumers reach their financial goals? Today’s consumers are split: 

Storage? Fifty-three percent of consumers agree they see their financial provider as just a place to store their money. This is even higher among younger generations — 58% of Gen Z and 59% of Millennials feel this way compared to 45% of Baby Boomers. 

Support? Fifty-five percent of consumers agree they see their financial provider as a partner in helping them reach their financial goals. Millennials and Gen X feel even stronger here — 62% of Millennials and 60% of Gen X agree compared to 41% of Gen Z and 55% of Baby Boomers. 

These findings paint several opportunities for financial providers to avoid becoming purely seen as a storage facility. Let’s end where we began — it’s about establishing trusted relationships with consumers that drive positive outcomes. 

For financial services, there is no greater impact than how we help consumers reach their financial goals and empower them to be financially strong. Together, we can fix the broken money experience and drive lasting trust with consumers. —A Time for Trust: The Consumer Money Experience

Survey Methodology

This survey of 1,053 American adults was conducted by MX in June 2023 using the online survey platform. Results included an even split in responses across each generation: Baby Boomers (25%), Gen X (25%), Millennials (25%), and Gen Z (25%). The respondents were also evenly split between male and female (50% each), as well as White and non-White (Asian, Black, Hispanic, or Other).