Fintechs Are Winning the Switching Game: Here’s How Community Banks Can Fight Back with Life Event Engagement
By Devon Kinkead
The numbers paint a stark picture for traditional financial institutions. According to recent research from Curinos, fintechs’ share of checking account openings grew by six percentage points from 2023 to 2024—an acceleration rather than the expected leveling off. Even more troubling for community banks and credit unions, fintechs dominated the paycheck-to-paycheck segment while also beginning to flip the script by capturing more switchers and new-to-banking accounts than branch-based banks.
But here’s what the data isn’t telling you: every one of those switches represents a life event that traditional institutions missed. And every missed life event is a missed opportunity to demonstrate value not just to an individual, but to an entire household.
The Real Story Behind the Switching Surge
The Curinos study doesn’t look at overall market share, but instead at the movement of people who switch accounts or open accounts for the first time—the “churning” population. This distinction is crucial because it reveals where the battle for customer loyalty is actually being won and lost: at moments of transition.
Movement among institutions has become much easier, especially compared to the days when changing primary providers meant visiting two institutions’ branches. But ease of switching is only part of the story. The deeper truth is that customers switch when they feel their current institution isn’t meeting their evolving needs—needs that almost always stem from significant life events.
Why Life Events Matter More Than Ever
Think about when people typically consider switching banks:
- Starting a new job (direct deposit setup)
- Getting married or divorced (account consolidation or separation)
- Buying a home (mortgage shopping)
- Starting a business (business banking needs)
- Receiving an inheritance or windfall (wealth management requirements)
Each of these moments represents a major life event. Paycheck-to-paycheck consumers are frequently looking for a better deal from a financial provider, so they are often open to switching, but they’re not just looking for better rates. They’re looking for institutions that understand and respond to their changing circumstances.
The Household Perspective: Your Secret Weapon
While fintechs excel at capturing individual accounts through slick apps and instant gratification, community banks and credit unions have a unique advantage: the ability to serve entire households across generations. The study found that fintechs dominated the paycheck-to-paycheck segment, while direct banks and national banks had greater success among the smaller pool of affluent customers and HENRYs (high earning, not rich yet).
This segmentation reveals an opportunity. Affluent customers and HENRYs don’t exist in isolation—they have children approaching college, parents planning retirement, and extended family members who could benefit from financial guidance. By identifying life events through deposit patterns and transaction behaviors, community institutions can engage entire household networks before fintechs fragment these relationships.
Turning Defense into Offense with Predictive Engagement
The traditional approach to retention is reactive: wait for signs of attrition, then scramble to save the relationship. But what if you could identify life events before they trigger a switch? This is where exceptional deposit monitoring and life event interviews becomes transformative.
Consider these proactive engagement strategies:
For Young Professionals (Prime Fintech Targets):
- Monitor for first significant paycheck deposits
- Identify bonus or commission patterns suggesting career growth
- Recognize apartment deposit refunds signaling potential home purchases
- Engage with relevant financial planning before they search elsewhere
For Growing Families:
- Detect college savings patterns indicating children’s ages
- Identify childcare payment patterns suggesting family expansion
- Recognize large deposits that might be gifts for home down payments
- Offer coordinated household financial planning
For Established Customers:
- Monitor for retirement account rollovers
- Identify business income patterns in personal accounts
- Recognize inheritance or property sale proceeds
- Provide wealth transfer planning for next generation
The Technology-Enabled Human Touch
Most banks make the greatest portion of their consumer banking income among affluent customers and the high end of the stable mass market, yet they can’t afford to ignore the rest of the market. The solution isn’t to compete with fintechs on their terms—it’s to leverage technology to deliver personalized, proactive engagement at scale.
This means:
- Automated Life Event Detection: Using technology to identify patterns that signal life transitions before customers start shopping for alternatives.
- Contextual Micro-Engagements: Delivering timely, relevant outreach through digital banking channels when life events occur, not through generic marketing campaigns.
- Household Financial Mapping: Understanding how individual customer relationships connect to broader family financial needs.
- Predictive Retention Modeling: Identifying at-risk relationships based on attrition risk model use — proactively addressing unmet needs.
From Retention to Growth
The most powerful insight from the Curinos research isn’t about who’s winning the switching game—it’s about why people switch in the first place. Andrew Hovet from Curinos explains that HENRYs “are kind of like tomorrow’s affluent,” making them attractive to banks, but they’re also “fair game for fintechs because they are younger and face life events that could lead them to seek another financial provider”.
This is where the opportunity lies. By identifying and responding to life events before they trigger switching behavior, community banks and credit unions can transform retention from a defensive strategy into an offensive growth engine. Every exceptional deposit, every account milestone, every transaction pattern tells a story about a customer’s life journey. The institutions that listen to these stories and respond with timely, relevant engagement will be the ones that thrive.
The Path Forward: Action Steps for Community Institutions
- Implement Exceptional Deposit Monitoring: Deploy technology that identifies unusual deposits and links them to probable life events requiring financial guidance.
- Ask Customers about Upcoming Life Events and create a Life Event Playbooks: Develop specific engagement strategies for common life transitions, from college planning to retirement.
- Build Household Views: Move beyond individual account management to understand and serve complete household financial relationships.
- Digitize Proactive Outreach: Use digital channels to deliver personalized engagement at the moment of need, not weeks or months later.
- Measure What Matters: Track not just account retention but household growth and multi-generational relationships.
The Bottom Line
The broadening of fintechs’ offerings is supporting growth in interest and share, and Curinos sees a high rate of movement from fintech to fintech. This churn among fintechs themselves reveals their fundamental weakness: transactional relationships built on features rather than trust.
Community banks and credit unions don’t need to out-fintech the fintechs. They need to out-care them. By combining the power of predictive analytics with the mission of serving whole households through life’s transitions, traditional institutions can build the kind of multi-generational loyalty that no algorithm can replicate.
Every exceptional deposit is a life event. Every life event is an opportunity. And every opportunity seized is a relationship deepened—not just with one customer, but with an entire household that will weather market changes, resist switching temptations, and grow with your institution for generations to come.
The fintechs may be winning the switching game today, but the future belongs to institutions that recognize deposits aren’t just numbers—they’re life stories waiting to be understood and supported.
Learn morehttps://micronotes.ai/request-a-demo/
