Traditional banks are no longer dominating the percentage of new checking accounts that are being opened, as new digital players and fintechs gain ground in the battle for the type of accounts long viewed as the anchor product of a consumer’s financial relationship.

That’s according to survey data gathered by management and technology consulting firm Cornerstone Advisors, which found that digital banks and fintechs made up nearly half (47%) of all new checking accounts opened so far in 2023, up from 36% in 2020.

Over the same period, the share of checking accounts opened at the nation’s largest banks dropped from 24% to 17%, while regional lenders’ share declined from 27% to 21%, according to the survey. Community banks’ and credit unions’ share of new checking accounts remained flat at 12% during the period.

But despite the gains that fintechs and digital banks have made in recent years, consumers aren’t ready to completely ditch their accounts with traditional banks, said Cornerstone Advisors Chief Research Officer Ron Shevlin, who broke down some of the survey’s findings in a Forbes article last week.

That’s due to consumers’ evolving attitudes toward defines a primary financial institution, he told Banking Dive.

Of the consumers who opened a checking account in 2022 or 2023, nearly a third said they have more than one checking account, according to the survey.

“The idea of a primary financial institution is a meaningless thing, because [Gen Z and millennials] have so many financial relationships,” he said. “Their financial relationships are not just with providers of accounts, but providers of tools.”

Many fintechs offer tools that legacy banks lack, Shevlin said. And boosted by the growth of third-party platforms like MX and Plaid that enable easy money movement, customers are willing to spread their funds across a variety of accounts in order to craft a financial cocktail that fits their needs, Shevlin said.

“It's relatively frictionless. It's nothing to a consumer to have their direct deposit with a traditional bank like Bank of America, and then on a weekly basis, move a bunch of it to Chime to do some payments, to Starbucks to pay for coffee, or to Robinhood to do some investments,” he said.

The growing disintermediation of consumers’ financial footprints is challenging traditional banks to rethink the checking account product, Shevlin said.

“The traditional thinking was that the checking account was the anchor product of the relationship,” he said. 

Many banks have viewed the checking account relationship as an opportunity to springboard to other products and services, and have stopped charging monthly fees, Shevlin added. 

“That might have been true 30 years ago, but it sure as hell has not been true for at least the past 10 years,” Shevlin said. “It's a pricing issue on the part of the traditional financial institutions, and it's a product challenge as well.”

But certain factors are still giving traditional firms an advantage, and may be keeping consumers from completely ditching their relationships with a legacy bank, Shevlin said.

The ability to walk into a bank branch to resolve an issue in person is still considered an important reason to maintain an account with a bricks-and-mortar institution, Shevlin said.

Consumers may also have safety concerns and could be wary of banking entirely at a startup neobank, even if deposits are insured through the fintech’s sponsor bank, he said.

Still, financial institutions can’t ignore the fact that consumers are increasingly willing to move money around a mix of platforms in order to access the tools and features they want, Shevlin said.

“There's reasons why they maintain that traditional bank relationship, but they're going to the new ones because there's some feature functionality or some product aspect that they're looking for and want to get,” Shevlin said.

While only a fraction of Americans opened new checking accounts this year (14%), that number is growing, according to Cornerstone’s research. 

In 2022, 15% of consumers said they opened a new checking account. That’s up from 12% in 2021 and 10% in 2020, according to the firm’s survey results.