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A new type of tax-advantage account making its way through Congress could be a chance for banks to attract and retain customers.

Key takeaways: NYCB has attempted various maneuvers to encourage deposits and account openings since its tumult began—including offering the highest APY savings account in the US. It makes sense to rebrand to rebuild customer trust, but its strategy risks cutting off an important source of income after the bank has struggled to instill confidence in its investors.

The news: Nearly half of US and UK consumers admit to abusing retailers’ returns policies in the past 12 months, according to a survey conducted by The Harris Poll. Our take: Retailers face a Catch-22 when it comes to returns. Being too generous opens the door for fraud and can result in retailers being overburdened by reverse logistics costs. But being too restrictive can deter shoppers from opening their wallets.

Diving into card growth: Card fee revenues jumped up 18% YoY thanks to higher spend and account openings from Gen Z and millennials. Card spend increased 6% YoY. Growth was even across both goods and services (G&S) and travel and entertainment (T&E). We forecast Amex’s full-year card transaction value will increase 10.4% YoY.

Nearly 21% of consumers who opened a new checking account in the past year cited deposit safety as a key factor when choosing an account, per our April 2023 US Account Opening Feature Demand survey. Getting through to them requires dedicating campaigns to features that promote safety and security. Close the deal with highly demanded digital account opening tools.

The card network launched an account owner verification tool in Europe and partnered with Algoan to boost financial inclusion

The bigger picture: Total US credit card account openings are projected to total 34.8 million in 2024, up 5.2% year over year (YoY), per our forecasts. This is a deceleration from a 7.6% increase this year.

Adding a consumer’s BNPL use had generally the same effect on their credit score as opening a new account. Why this matters: Credit reporting has been at the center of the global BNPL regulatory debate. Proponents argue the lack of transparency into consumer BNPL indebtedness—so-called phantom debt—distorts issuers’ perception of consumers’ financial health.

Ads, articles, or posts on Instagram prompted 54.8% of Gen Zers to open a new checking account in the 12 months ended April 2022, per our Account Opening Benchmark survey. It had even more of an impact on Gen Z than Facebook did on total respondents; the latter is the most important channel overall, with 43.6% of total respondents opening a new account due to content on Facebook.

Consumers want a quick application process and immediate access to their new account. But an experiment found that banks can take up to two weeks.

Adding a consumer’s BNPL use had generally the same effect on their credit score as opening a new account. Affirm and FICO resolved those reporting concerns by aggregating separate loans together. Our take: Reporting BNPL loans to Experian is likely only the beginning of more expansive reporting from BNPL providers.

Nearly 21% of consumers who opened a new checking account in the past year cited deposit safety as a key factor when choosing an account, per our April 2023 US Account Opening Feature Demand survey. Getting through to them requires dedicating campaigns to features that promote safety and security. Close the deal with highly demanded digital account opening tools.

New account openings have been stable for the last six months and will likely support ad spend growth into next year. But credit tightening will test how long that growth can persist. Senior loan officers are reporting the longest stretch of elevated credit tightening since 2009.

Retail banking and wealth: Firms will use generative AI to train models behind know-your-customer (KYC) processes for account opening. It will also power natural language models to fine-tune virtual assistants. SMB banking: The technology will efficiently comb through non-numerical loan application data like business plans.

In fact, credit card openings are approaching a 12-month high, per VantageScore. But Q3 could be the quarter we finally see a slowdown or outright drop in credit card account openings. Credit card spending is weakening: Consumer sentiment is on the decline, which may shift spending habits.

As might be expected, 95% of survey respondents cover social media management. 76% are responsible for digital channel management, including websites and/or online account opening. 51% handle marketing technology management (CRM, the Marketing Customer Information File, and/or marketing automation). 48% oversee data and analytics—a trend also seen in other industries as customer data and insights drives

Most digital bank accounts opened in the coming years will likely belong to Gen Zers opening their first bank accounts, according to our US Digital Account Opening Forecast 2023 report. Next year, 40.4 million Gen Z consumers in the US will be digital banking users, per our forecast.

But easy come, easy go: New account opening is relatively frictionless, making consumers much less inert should a better offer come along. Instead, banks should zero in on their target segments’ financial goals and create campaigns around them. For example, Bank of America has been focusing on wellness tools and financial advice, such as with its #BetterMoneyHabits ad series.

Open banking, alternative credit models drive US credit card digital account opening growth. Amazon adds new BNPL option to strengthen digital wallet. Apple’s financial services marketing promotes an immersive lifestyle, not just products. US mobile wallet users prefer PayPal, especially for online purchases.

Ads, articles, or posts on Instagram prompted 54.8% of Gen Zers to open a new checking account in the 12 months ended April 2022, per our Account Opening Benchmark survey. By the numbers: During Q2 2023, BofA added 15,000 Instagram followers, the largest increase of any US bank in the publication’s top 100 ranking for that social media platform.

However, many are still getting the cold shoulder from those large banks, and their account opening times can be longer than startup-focused lenders. Some banks are requiring a minimum $10 million in account deposits.