Are you engaged yet? The Engagement-Profitability Link: Maximizing Checking Account Success
Research has established a clear link between customer engagement and the profitability of checking accounts. This seems pretty obvious and is a known problem - unactivated or unused debit cards, low digit MAU, accounts with few if any transactions and low or no balances are endemic in the industry. Community FI's are spending hundreds of dollars to attract new customers and they are not always seeing the return.
Engaged customers, those who actively use their accounts and interact frequently with their bank, contribute significantly to profitability. These customers typically maintain higher average balances, use a wider array of financial products, and are less likely to switch to a competitor. Furthermore, their active participation often leads to increased fee income from services such as overdraft protection, premium accounts, and transaction-based charges.
For banks and credit unions, the implications are profound. To boost engagement, financial institutions should focus on delivering exceptional customer experiences. This can be achieved through personalized services, intuitive digital platforms, and proactive communication. Offering value-added services, such as financial planning tools, investing and rewards programs, can also enhance engagement by making banking more relevant to customers’ daily lives.
By prioritizing engagement, banks and credit unions not only drive profitability but also build lasting relationships that withstand the test of time.
The path to profitable checking accounts lies in the heart of engagement. Financial institutions that recognize and act on this connection are poised to reap substantial rewards.
Unifimoney is a turnkey digital wealth management platform enabling Community Financial Institutions to compete with Fintechs and Big Brand Banks at high speed, low cost and without the need for technical integration. Owned by Palm Ventures a large family office backed investment firm. If you would like to speak to us please reach out or visit the website.
