Neobanks and direct banks are redefining the traditional banking experience by offering convenient and personalized services. However, these innovative institutions are facing a challenge in the form of a decline in account origination.
Despite these significant gains in customer satisfaction, the number of new customers opening direct bank accounts declined 2% this year, according to the JD Power 2023 U.S. Direct Banking Satisfaction StudySM. The decline in new customer volume is most pronounced (-6%) among neobanks, a subset of the online banking sector that consists of fintech companies that offer online banking services through a partnership with an established bank.
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To overcome this hurdle and achieve strategic growth, it is imperative for neobank and direct banking leadership teams to adopt a client-centric strategy with a focus on client segmentation. In the short video, Paul McAdam, senior director of banking and payments intelligence at JD Power reveals changes in top reason that drive account origination.
Actionable Insights
Neobank and direct banking leadership teams must address the decline in account origination by adopting a client-centric strategy. Client segmentation plays a vital role in this endeavor, enabling banks to tailor their offerings and experiences to different customer segments. The insights provided by JD Power’s Direct Banking Study offer a valuable resource to inform decision-making and drive strategic growth. By embracing client segmentation and leveraging custom research, neobank and direct banking leadership teams can position themselves for success in the evolving banking industry.
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