OBSERVATIONS FROM THE FINTECH SNARK TANKA new study from Cornerstone Advisors, looking at the financial services providers that Americans opened checking accounts with in 2024, underscores the continued dominance of digital banks and fintechs like Chime, PayPal, and Square in the checking account market.
What’s going on in the checking account market?
Digital banks and fintechs dominate new checking accounts opened…Digital banks and fintechs captured nearly half (44%) of all new checking accounts opened in 2024. Combined, megabanks (Bank of America, Chase, Citi, and Wells Fargo) and regional banks (those with $100 billion to $1 trillion in assets) accounted for 43% of all accounts opened.
…although their share slipped from 2023. Digital banks’ and fintechs’ 44% market share was down from 47% in 2023, as megabanks gained back three points and regional banks won back two percentage points.
Chime and PayPal dominate. Combined, the two companies accounted for nearly half (49%) of digital bank/fintech account openings—up from 43% in 2023—and 21% of all checking accounts opened in 2024.
Winners and losers. PayPal, PNC, and Wells Fargoeach grew their share of new accounts opened by two percentage points in 2024. Community banks’ share, however, declined by two percentage points, while TD Bank saw its share drop by 2.5%. The biggest decline was turned in by a digital bank—Varo Bank—whose share of new accounts opened dropped 2.7%.
New checking accounts opened by type of financial institutionSource: Cornerstone AdvisorsIn 2023, 14% of Americans opened a new checking account, in line with 2022 when 15% of consumers opened a new checking account. In 2024, however, that percentage dipped to 12%, which means the winners—the banks and fintechs whose market share increased—gained share of opened checking accounts in a shrinking market.
Why Digital Banks and Fintechs are Dominating Checking Accounts
Why do digital banks and fintechs dominate? It’s not because they offer a better “mobile banking” experience (they don’t). In fact, just one in five consumers who opened a checking account in 2024 said they did so because they were looking for a better mobile experience.
Digital banks and fintechs continue to dominate new checking account openings because of their product offerings. The accounts are more like reconfigured mashups of features and functionality from separate financial products or services.
Bankers may claim that it’s inaccurate to call what PayPal or Square offer a “checking account,” but young consumers don’t differentiate between a checking account and a spending account—they don’t care about this distinction. When asked who provided the last “checking” account they opened, many say PayPal, Square Cash App, SoFi, and even Venmo.
How the Big Banks Are Fighting Back to Win New Checking Accounts: Mo’ Money
The megabanks and regional banks, collectively, rebounded five percentage points from 2023