Digital-only banks are continuing to gain market share by offering checking accounts with no monthly fees, no minimum balance requirements, and early direct deposit access. The competitive pressure is forcing traditional banks to reduce or eliminate fees on their own checking products.
Consumer banking surveys show that fee avoidance is the primary reason customers switch to digital banks, followed by higher savings rates and better mobile app experiences. However, some customers miss the availability of physical branches for complex transactions.
Industry analysts predict that the distinction between digital and traditional banks will continue to blur as legacy institutions invest heavily in their digital platforms.
