MetaBank® Study Reveals Digital Banks Should Focus on Growing Share of Banking

Rhea-AI Summary

MetaBank's new research reveals critical insights into consumer banking trends, indicating that consumers are increasingly viewing digital accounts as supplements to traditional ones rather than replacements. This presents significant growth opportunities for digital banks. The study identifies 'Hybrids'—consumers holding both digital and traditional accounts—making up 27% of the banking population. With nearly half of U.S. consumers owning multiple accounts, the report suggests targeted marketing strategies focusing on digital channels could enhance acquisition efforts.

Positive

• 27% of consumers identified as 'Hybrids' are open to new accounts, boosting growth potential for digital banks.
• 46% of consumers leverage multiple accounts for budgeting, indicating a trend towards account diversification.
• Digital channels are the primary driver for consumer awareness, allowing digital banks to optimize marketing strategies.

Negative

• None.

SIOUX FALLS, S.D., Feb. 2, 2021 /PRNewswire/ -- Today's consumer is very loyal to their bank, and holds onto their account for an average of 14 yearsⁱ. At the same time, more than 40 million U.S. consumers have gone digital with their banking and a large percentage now have multiple accounts, presenting an opportunity for neobanks and digital banks to grow, simply by focusing their acquisition efforts on increasing share of banking (versus switchers).

New research provides insights into how digital banks can adapt their marketing and acquisition strategies for growth.

These are among the actionable insights identified in new research from Meta Payments, a division of MetaBank®, N.A., and Visa®, The Digital Migration: Growing Share of Banking. MetaBank, N.A. ("Meta") is a national bank, a subsidiary of Meta Financial Group, Inc.® (Nasdaq: CASH) and a leader in providing innovative financial solutions to consumers and businesses throughout the country.

"When it comes to digital banking, our research showed many adopters view their digital accounts as an addition to their existing accounts, not a replacement. Digital banks would be well served to focus marketing and acquisition strategies on capturing the many consumers who are open to having multiple accounts," said Sheree Thornsberry, Meta EVP and Head of Payments. "Further, our research showed consumer awareness of digital banks is being driven primarily by digital channels, indicating online and social media marketing efforts could bring a return on investment."

The Digital Migration: Growing Share of Banking examined how consumers are navigating digital banking, and is based on the responses of 1,800 U.S. adults. Key trends from this research are included below. An ebook summarizing this research is available here.

• The "Hybrid" consumer could be key to unlocking digital banking growth. Hybrids are those consumers who maintain both digital-only and traditional bank accounts. This group makes up 27% of the banking population, and these individuals are six times more likely than their peers to have three or more bank accounts. Notably, members of this group are also highly unlikely to give up their traditional accounts — 77% say they'd never do so. Hybrids are simply open to trying new accounts that meet their needs.   
• Why do so many consumers hold multiple bank accounts? Nearly half of the U.S. population owns multiple accounts. For many, budgeting is a key factor, with 46% opting to leverage their accounts to separate funds for everyday spending.
• Once digital banks have homed in on their target consumer, the research showed there are a few key ways to reach them. Consumers are largely becoming aware of digital banks via digital channels, including online (40%) and via social (34%). Though digital banks are still employing traditional advertising channels like billboards and magazines, these channels have been found to be among the least effective.

Click here to download the complete The Digital Migration: Growing Share of Banking ebook, and to learn about features that drive digital account acquisition, key segment profiles, satisfaction and tenure rates and more.

As a leading provider of innovative financial solutions to consumers and businesses throughout the country, Meta is powering some of the nation's leading digital banking and payment concepts.

About MetaBank, N.A.

MetaBank^®, N.A., a national bank ("Meta"), is a subsidiary of Meta Financial Group, Inc.® (Nasdaq: CASH), a South Dakota-based financial holding company. Meta is a leader in providing innovative financial solutions to consumers and businesses in under-served niche markets and believes in financial inclusion for all. Meta's commercial lending division works with high-value niche industries, rapid-growth companies and technology adopters to grow their businesses and build more profitable customer relationships nationwide. Meta is one of the largest issuers of prepaid cards in the U.S., having issued more than a billion cards in partnership with banks, program managers, payments providers and other businesses, and offers a total payments services solution that includes ACH origination, wire transfers, and more. For more information, visit the MetaBank website.

Investor Relations:

Brittany Kelley Elsasser
Director of Investor Relations
605-362-2423
bkelley@metabank.com

Media Relations:
mediarelations@metabank.com

ⁱ Bankrate, "Survey: While Checking Fees Vary Wildly by Race and Age, Americans Stay Loyal to Their Banks." https://www.bankrate.com/banking/best-banks-consumer-survey-2020/ 

View original content:http://www.prnewswire.com/news-releases/metabank-study-reveals-digital-banks-should-focus-on-growing-share-of-banking-301219959.html

SOURCE Meta Financial Group, Inc.

FAQ

What insights did MetaBank's study reveal about consumer banking habits?

MetaBank's study indicates that many consumers view digital accounts as additions rather than replacements, suggesting a trend towards account diversification.

How are 'Hybrids' significant for digital banks according to the research?

'Hybrids' make up 27% of the banking population and are six times more likely to hold multiple accounts, representing a key target for digital banks.

What percentage of U.S. consumers hold multiple bank accounts?

Nearly half of the U.S. population owns multiple bank accounts, showing a trend towards financial management through account diversification.

What marketing strategies should digital banks adopt based on the study?

Digital banks should focus on digital and social media channels to enhance consumer awareness and acquisition, as traditional channels are less effective.