What Does It Take for Banks To Lure Customers?

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goodluz / Shutterstock.com

Switching banks is a headache. It’s not just the ostensibly simple matter of moving money from one home to another, it’s also a process of updating all of your direct deposits, both incoming and outgoing, and possibly other fine print kerfuffles.

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A new poll by GOBankingRates shows that most consumers aren’t swayed by sign-up bonuses to go through this trouble. Or perhaps their current banks are serving them too well.

The poll, which has garnered nearly 2,000 responses, found that 40% of Americans said a bank’s sign-up bonus is not a factor in their decision to change banks. Two-thirds of those people were 65 and older.

The poll also found that only 2% of consumers would leave their current bank for a sign-up reward of $100; 15% would leave for $500; 16% would leave for $1,000 and 28% wouldn’t switch unless they were offered a whopping $2,000.

What does it take for banks to get new customers?

What Actually Gets Folks To Switch Banks

Most consumers require more long-term benefits than a $100, $500 or even $1,000 one-time sign-up bonus to go through the rigmarole of changing banks. Here’s what finance experts say folks are actually looking for to bite the bullet and make the switch from one bank to another.

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No Fees

“[No fees] are like an ongoing reward for clients,” said Rajat Soni, CFA and personal finance expert. “A reward of $300 would only cover 15 months of fees when the monthly cost of owning an account is $20. On the other hand, a $0 account is like receiving an ongoing reward of $20 a month.”

The GOBankingRates Best Banks 2023 survey backs up Soni’s thought: About 40% of people said low fees were the most important thing when opening an account with a new bank.

High Interest Rates

“When it comes to switching banks, the discussion is almost always about interest rates,” said Annie Hanson, financial coach and owner of Mindfully Money. “[Current] rising interest rates have certainly increased the interest in switching banks to get better rates, but it was happening before that, too. People wanted to switch to high-yield savings accounts because even that interest rate was better than what most regular brick-and-mortar banks offered.”

Good rates were the second-biggest lure for people opening accounts at new banks; about 15% of the survey’s respondents cited that as their main draw.

Typically online banks tout higher interest rates than physical banks because they can afford to with what they save on infrastructure and in-person staff.

Better Technology/Apps

People are also seeking sleeker mobile technology from their financial institutions.

“Apps have changed banking and personal finance by allowing us to deposit checks or transfer money from home,” Soni said. “In the past, depositing checks would require that you go into a branch.”

Stellar Customer Service

“Having competent employees makes a big difference when ensuring that certain tasks are completed,” Soni said. “Getting passed from representative to representative is something I’ve dealt with before and it’s definitely not a fun experience.”


“People value convenience,” said Molly Ford-Coates, an accredited financial counselor and the founder and CEO of Ford Financial Management. “Having a bank that is easy to access no matter where you are is a huge plus for customers. This can be an online bank for people who prefer that, or a brick-and-mortar bank with many locations for those who prefer to handle their business face to face. The time and effort saved by customers play a large part in their choosing to do business with a company.”

Inertia Can Be a Powerful Force

There is one pertinent question to ask here: What if you’re already banking with an institution that provides all these sought after qualities — no fees, competitively high interest rates, solid technology, great customer service and convenience — and another bank that offers all the same traits is touting a $2,000 sign-up reward fee? Shouldn’t you make the switch?

You should, because if you don’t, you’re just turning down free money. But people simply don’t feel like going through the hassle.

“Inertia is a powerful influence, and I suspect that a one-time bonus is not a strong enough motivator to overcome it,” Ford-Coates said. “People do not change banks easily because it’s easier not to. It seems that our brains focus on the number of times you earn a reward instead of the total amount earned; therefore, a bonus that you get once seems less valuable than a bonus earned every month for an undetermined amount of time.

“Getting someone to switch depends on many factors, including what is important to a person, what marketing messages they are exposed to, how inconvenient something is, the earning possibility and how much time a person has to think about it and make the change.”

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This article originally appeared on GOBankingRates.com: What Does It Take for Banks To Lure Customers?