Disruption is everywhere. From how you get news to get around town and buy groceries, virtually every basic service has been reimagined, redesigned and refitted for a digital world — and banking is no exception. People today expect banks to meet them where they are, when they need them. That means 24/7 access via online and mobile banking portals with less hassle, greater speed and lower costs.
But while new banking options are welcome, the explosion of choice in services can be overwhelming. Rather than having a trusted financial advisor to lean on, many people feel as though they are living in the fiscal wilderness. Where do you start? And who can you trust with your savings?
As you prepare for your next big life move or other important financial decision, here are some key considerations to guide where and how you bank.
Should You Work With More Than One Bank?
Is it better to do all your banking with one financial institution or use several partners based on your needs and their solutions? For example, should your mortgage or car loan be handled by the same bank that keeps your checking and savings accounts?
The latest annual FIS Consumer Banking PACE Index — an in-depth study on consumer expectations of financial institution performance — shows that 40 percent of U.S. households today use more than one bank, particularly higher-income households. On average, U.S. consumers have between three and three and a half banking accounts, and 21 percent of American banking consumers already have some type of relationship with a digital bank. Among consumers with multiple accounts, their primary bank is usually the place for deposit accounts and lines of credit; other banks are used for credit card accounts, investment accounts and loans — especially student loans.
If you’re thinking about adding another banking partner, consider: accessibility, service dependability, security and convenience. In addition to obvious questions about rates and fees, it’s important to ask questions about:
Whether the bank is FDIC-insured
What data security and consumer protection policies they have in place
Whether you can access service through multiple branch, mobile and online facilities
Ranked: 10 Best National Banks of 2016
What’s Your Relationship With Your Bank?
When looking at banks, consider what relationship you want to have. Despite the evolution of digital technologies and interfaces, much of the service you receive today comes down to relationships. From a bank perspective, the more history and experience it has with you, the more it can anticipate and support your growing needs. Your relationship with a bank opens the door to better service and offerings when you really need them — particularly during major life events such as buying a first home, starting a business or setting up a college savings fund for children.
But this isn’t always top of mind for consumers. It turns out 40 percent of consumers are either undecided or contemplating a non-primary bank. However, the FIS study shows that consumers who haven’t yet made up their mind are receptive to utilizing their primary bank if it offers the product or service. Thus, you might consider reaching out before starting a new banking relationship.
How Does Your Bank Make Life Easier?
Research shows consumers want simplicity when it comes to banking. The FIS survey revealed that the ease of understanding and using banking products is the fastest-growing priority among banking customers, rising five points in the ranking for importance year-over-year. Solutions that are easy to access, understand and manage saves time and worries — particularly for consumers who are more resource-restricted.
In sum, banking, much like everything else, is sure to continue to evolve with technology in the coming years. You can expect banks to adapt to new consumer needs and expectations, with new banking solutions changing how you manage your money. Amidst this sea of choices, it’s important to focus on what matters most to you and make decisions that reinforce a solid financial foundation for your life.