Wide Customer Interest In Nonbank Checking

With more financial service companies offering checking accounts, banks could lose ground in retail deposits, a recent survey suggests.

The survey of 825 checking account holders and prospects found that one in seven was "very likely" to consider opening a checking account with a company other than a bank. Companies considered by respondents were mutual fund companies, brokerage firms, credit card companies, insurers, retailers, software companies, and Internet service providers.

Fund companies, brokerage firms, and credit card companies were cited by the highest percentage of respondents. Thirty-two percent of those surveyed said they were "very likely" or "somewhat likely" to consider opening a checking account with a mutual fund company, while 27% favored brokerage firms and 22% credit card companies.

The study does not show how much money, if any, is actually leaving the bank channel or whether the respondents are highly profitable customers, two very important factors, said Robert Tetenbaum, executive vice president of New York-based First Manhattan Consulting Corp.

But the study does quantify to some extent an ongoing trend in financial services. Some banks have responded by reinventing themselves as full-fledged financial services organizations, trying to recapture customer dollars through brokerage operations and proprietary mutual funds.

Certain banks are also being very aggressive with innovative customer retention programs and preemptive strikes to prevent at-risk customers from fleeing, said David Tetenbaum, vice president of First Manhattan.