Approximately 20 million US adult banking customers—roughly 9 percent of the total—switched primary banks in the past year. These bank switchers represent the “in-play” market, and the winners in the industry will be those able to compete and grow their market share.
Innovation has become a paramount consideration when these switchers seek a new banking provider. A recent A.T. Kearney survey of US consumers finds that among those who switched primary banking relationships, strong digital and mobile capabilities such as online banking, mobile banking, and reputation for data security play an important role in bank selection decisions.
The priority being placed by consumers on innovation and on digital and mobile capabilities is driving market share movement. Consumers are migrating away from regional, mid-size, and local banks in favor of national and super-regional banks. How consumers pick new banks will increasingly emphasize innovation, leading to digital-driven market share consolidation within the industry over the next 10 years.
Digital innovation has become imperative. Banks with the strategic foresight, technological and marketing expertise, and ability to invest in digital and mobile capabilities will be the winners.