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On average, how long do people stay with their bank before switching?
OVERVIEW
Hi there! Thank you for your question about how long people stay with their bank before switching. The short answer is that the average US adult has used the same primary checking account for approximately 16 years. Twenty-six percent (26%) have held on to a checking account for more than 20 years. Seniors 65 years and older have stuck with checking accounts the longest: 26 years, on average. Millennials ages 25-34 are 2-3 times more likely to close all accounts with their primary financial institution than people in other age group.
Below is a deep dive of my findings.
HOW LONG BEFORE PEOPLE SWITCH BANKS
According to a survey conducted by Bankrate and Money, "the average US adult has used the same primary checking account for approximately 16 years." The survey found that 26% have held on to a checking account for more than 20 years. Seniors 65 years and older have stuck with checking accounts the longest: 26 years, on average.
However, for many people, switching banks seems formidable. In the survey, 14% said "it would be too much of a hassle."
Notwithstanding a sense of weakening bonds with customers, "banking customer attrition rates are at historic lows in the vicinity of 15%", as reported by Customer Think. However, during the first year, the annual churn rates on new customers still float in the 20%-25% range. Half of these don’t make it past the first 90 days after opening their accounts.
WHO ARE MOST LIKELY TO SWITCH
As stated by Consumer Bankers, "national banks are now winning an outsized share of primary checking purchasers, especially among Millennials." Still, the Millennials at national banks also turn out to be more open to switching banks. The report says, 63% of Millennials who have their primary checking at a national bank compared with 51% of Millennials at large regionals, also said they were open to switching that relationship. Millennials ages 25-34 are 2-3 times more likely to close all accounts with their primary financial institution than people in other age group.
WHY DO PEOPLE SWITCH BANKS
This particular source exhibits a chart that shows "78.5% of people surveyed were very unlikely to switch banks, 10.5% were somewhat unlikely to switch, 5.5% were somewhat likely and 5.5% were likely."
Moreover, 2017 Bank & Financial Loyalty Statistics reveal that 42% of consumers said that a false decline would motivate them to leave their banking institution. In addition, 59% of Millennials said they were very, or somewhat likely to leave their bank over a false decline versus 21% of seniors. The statistics also show that 44% of consumers with income over $100,000 per year and 48% with income between $75,000-$99,999 per year were somewhat or very likely to leave their financial institution over a mistakenly declined credit card transaction.
According to reports, 45% of Millennials ages 25-34 and 36% of Millennials ages 18-24 alluded to high fees as a reason for switching banks. Too few ATMs and inconvenient branch location tied as the number 3 reason Millennials age 25-34 switch banks.
CONCLUSION
To wrap it up, review of the data revealed that the average US adult has used the same primary checking account for approximately 16 years. Twenty-six percent (26%) have held on to a checking account for more than 20 years. Seniors 65 years and older have stuck with checking accounts the longest: 26 years, on average. Millennials ages 25-34 are 2-3 times more likely to close all accounts with their primary financial institution than people in other age group.
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