NEW YORK—Many of the nation’s largest banks and credit unions now share something in common–all are losing primary financial institution status among consumers, predominantly among Millennials, according to recent consumer studies conducted by Cornerstone Advisors.
The reason? Consumers have been switching to digital-only providers, Cornerstone stated.
The studies, conducted in October 2020 and July 2021, identified which financial institutions and fintechs consumers have their primary checking account with, stated Cornerstone’s Ron Shevlin in a report published on Forbes.com.
The percentage of Millennials (consumers 26 to 40 years old) who call a Bank of America checking account their primary account declined from 22% in October 2020 to just 13% in July 2021. The megabank also lost share of primary status among Gen Xers (ages 41 to 55), dropping from 18% to 10% over that same time period, Shevlin stated.
Overall, the number of consumers whose primary checking account is with Bank of American declined from 38.6 million to 26.3 million, a 32% decline.
Other Metrics
Shevlin pointed out that although not as dramatic a drop, other financial institutions lost share of primary checking account status including:
- Wells Fargo. The bank went from having 12% primary relationship share of Gen Zers in October 2020 to 9% share in July 2020, a loss of nearly 870,000 consumers
- Community banks. These institutions’ share of primary checking account relationship among Gen Zers dropped by a half, from 12% to 6% between the two studies. The drop reflects a loss of about 1.66 million consumers.
- Credit unions. As a group, more than 600,000 Gen Zers changed their primary checking account provider between October 2020 and July 2021
“Who did all these consumers shift their alliances to? Digital banks. Roughly one in four Gen Zers and Millennials now call a checking account from a digital bank their primary account. That’s about double the percentage it was at just nine months ago,” Shevlin stated.