Fifth Third Bank says it has introduced tools to make changing financial institutions easier.
“Switching banks has historically been stressful — scheduling an appointment at a bank to fill out applications, figuring out HR processes to set up direct deposit for a new account, waiting for money to be available, and ensuring bills get paid on time,” the company said in a Thursday (July 11) news release.
Fifth Third says it has streamlined these processes with the addition of its direct deposit switch — available to 1,000 of the country’s largest employers — and free overdraft window offerings to its Third Momentum Banking products and mobile app. The bank has also introduced a suite of security measures dubbed “SmartShield.”
With the free overdraft window, new customers are protected from overdraft fees for the first 90 days of their account.
“Free Overdraft Window gives customers peace of mind, especially as they navigate the bank switching process,” Ben Hoffman, the bank’s head of consumer product, said in the release.
“We understand that coordinating the timing of transferring existing deposits, setting up direct deposit and moving recurring payments to a new bank is a source of stress and may prevent some customers from seeking out the best bank for them.”
SmartShield, meanwhile, is a portal within the bank’s mobile app that offers customers options to protect their accounts “by providing alerts, login security, awareness of scams and controls to prevent theft,” per the release.
Fifth Third is rolling out these offerings at a time when, as noted here last week, traditional banks are cutting back on free services, leaving an opening for digital-only neobanks.
Research from PYMNTS Intelligence has found younger generations were already primed to switch their banking relationships away from the biggest lenders, as well as from community-based financial institutions.
The research also found that 42% of Generation Z consumers who bank with credit unions have changed their banking relationship in the past 12 months, as have 44% of Gen Z members who had accounts with traditional financial institutions.
Of those who switched, 60% have kept their prior account open but no longer use it as their main banking relationship, while 40% have closed their account entirely. It’s not unrealistic, that report said, to think that the switching of allegiances could be accelerated as banks place new fees on accounts.
“But that’s a big if,” PYMNTS wrote. “The digital players may find increasing pressures on their own models and interchange dynamics change. We reported this past spring that many of these companies still tie their fortunes to the payment networks, and by extension, payment volumes.”
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