In this edition of Marketing Insights: Savings & Deposits, we continue to examine the evolving marketing landscape driving new account acquisition. Deposit spreads have been the bane of banks in recent years. At the same time, the consumer value of funding deposits based on rate is diminished. In lieu of rate, the industry may have reached its peak checking incentive value: $500 for a new account. New FinTech players are emerging in the market and challenging the efficiency, value, and convenience in deposits typically offered by traditional brick-and-mortar banks.
This coincides with the widespread and innate internet usage of Millennials and soon-to-target Gen Z, who engage with social media from a young age. A recent Javelin study found that roughly 30% of adults used a mobile banking service on a weekly basis, while just 24% visited a branch weekly. According to Mintel research, 64% of Millennials agree that being able to perform all banking activities on a mobile device is important. Not only is mobile banking important now, its importance and availability will only increase over time.
All of these disruptive and socio-economic factors have changed the marketing landscape, fostering innovation that drives new account acquisition. Banks understand that rate and incentive can no longer stand alone as the value proposition for new account opening and that it will not withstand attrition. In order to make the value proposition more engaging and sticky, there is a continued focus on technology and innovation as part of the evolving value proposition. Banks are redesigning and enhancing mobile apps to deliver more sophisticated tools that promote simpler and faster banking; particularly during account login.
Chase has been leading the mobile experience efforts, and has recently launched a new responsive design experience inside the login page. Some notable changes include a customizable account snapshot, consolidation of bill pay, payments and transfers, and Spanish options. A few banks are rolling out a new instant-funds feature which allows money to be instantly available for withdraw once a check has been deposited via a mobile device or at an ATM. Promoting innovation in your value proposition is key to differentiating your bank and growing market share against the competition.