There are multiple ways to grow deposits, but some approaches may be more sustainable than others.
One approach is to pay more for them. Running a special rate, attracting rate-sensitive deposits, increasing the pressure on your cost of funds, and then potentially some of those funds move when a competitor posts a more attractive offer. Many FIs know this treadmill, and some may be running on it right now.
Another approach is to prioritize checking relationships, which can be a strong signal of primacy. Institutions with strong primary checking relationships may be better positioned to deepen that relationship over time. The problem: new checking growth is often where institutions get stuck.
The Old Playbook Quietly Stopped Working
For decades, checking acquisition often had a reliable engine: the branch. Convenient locations helped attract new households, and proximity handled much of the targeting. That engine hasn’t disappeared, but its role has changed. Branch traffic has declined in many markets and institutions may not be seeing the walk-in volume at the levels they once did.
U.S. bank branch counts peaked at more than 90,000 and have declined by roughly 20,000 since 2010, underscoring how much less the traditional branch network can be relied on as a standalone acquisition engine. In response, some institutions invested in volume marketing: blanket the market, count the accounts opened, and celebrate the topline. But months later, retail teams may find that some new accounts are low-balance, single-service, or inactive. The cost per account may look acceptable, while the cost per funded primary account tells a more complicated story.
Not All Checking Households Are Worth the Same
Here’s what the topline can hide: within any market, long-term value can vary significantly across checking households. Some may bring direct deposits, build balances, add a loan, and stay for years. Others may open with the minimum, never fund, or leave after the institution has incurred acquisition costs.
Institutions focused on growing low-cost deposits may not be relying solely on APY to compete. Many are shifting toward personalization and data-informed strategies. Instead of asking “how many accounts can we open?”, they may be asking “which households in our market are likely to benefit from this offer, open and fund an account, and remain engaged — and how can we reach them with relevant messaging?
That reframe changes everything downstream: where the budget goes, what the offer looks like, which channels carry it, and how success gets measured.
Three Questions Worth Asking This Quarter
- What share of the checking accounts we opened last year are funded and primary today? If you’re only tracking accounts opened, you’re measuring activity, not growth.
- Can we identify strong-fit checking opportunities and find more of them? Which households in our footprint are most likely to open, fund and actively use a checking account?
- What is a primary checking household actually worth to us over five years? Once you have that number, the case for precision targeting over volume marketing tends to make itself. Paying more to acquire the right household can be more efficient than paying less to acquire the wrong one.
Precision is the New Proximity
Branch location once did much of the targeting. Today, data can help guide acquisition more precisely. By treating checking acquisition as a disciplined, compliance-conscious marketing strategy, institutions can identify relevant opportunities, align offers to consumer needs, and measure outcomes beyond account volume.
Curious to see how Vericast can help you attract more customers or members? Our Acquisition and Retention solutions take the guesswork out of marketing. Contact us to set up a time to chat more.
Reminder: Data-informed acquisition strategies should be designed and monitored in a manner consistent with applicable fair lending, consumer protection, privacy, and marketing requirements.
