What US Direct Banks Need To Do To Win Checking Account Customers

Direct banks — banks with few or no branches — have exhibited their dominance over the last five or six years in getting consumers to move billions of dollars of assets into high-yield savings accounts and certificates of deposit (CDs). These same direct banks have been only moderately successful at selling checking accounts and becoming consumers' primary banking provider. The tide may be turning, however, fostered by, of all things, the economic crisis and financial regulations that have further soured consumers' view of traditional banks and are causing those same banks raise fees to replace lost revenues. To win the primary checking account relationship, direct banks will have to change consumers' perception of the need for branches along with delivering second-to-none customer service, low fees, and next-generation online services.