This is kind of interesting. Neobank Chime appears to be gaining popularity among new checking account openings.
Chime is a neobank, not a chartered digital bank, that provides services in partnership with The Bancorp Bank and Stride Bank. Chime prides itself on offering services that improve upon traditional banking providers, such as no-fee services, free ATM access, and a high-yield savings account. For Chime Checking Accounts, there are no overdraft fees, monthly service charges, or account minimums. Chase, on the other hand, hits you up with a monthly account service fee of up to $25, and for what exactly?
According to the Financial Services Churn Data and Analytics report from JD Power, for the period from August to September, Chime garnered 13% of new checking account openings, topping Chase, which garnered 9% of checking account openings. Wells Fargo and Bank of America were further down the list. SoFi, another Fintech, made it with 5% of the checking account openings.
The report is described as highlighting the trend of “soft switching” or customers moving their primary accounts to other institutions, even if they do not close one account. Inertia in financial services is enormous, so Chime’s growing popularity is pretty big.
While one report does not indicate a rosy future for digital banks and neobanks, it does indicate a need for traditional banks to up their game, but the addiction to silly fees is hard to break. This, combined with the high cost of real estate, makes it difficult for incumbents to provide banking services, which are quickly becoming the norm.