Your NPS scores might look fine. Customer satisfaction surveys probably come back positive. Yet customer data points to a fundamental shift in behavior.

According to The Financial Brand, consumers now engage with an average of 5.3 financial institutions.

What looks like a minor inconvenience is, in fact, a structural shift in customer behavior and the economics of retail banking.

Money is moving more freely between institutions, and you can't see where it's going - and that movement is quietly eroding profitability.

The multi-banking reality

Banking is no longer a monogamous relationship. Cornerstone Advisors found that 52% of new checking accounts opened in 2025 were additional accounts - and 72% of those were opened at a different institution.

Customers are not consolidating. They're diversifying - deliberately spreading their financial lives across multiple providers.

A traditional bank may still hold the mortgage and primary checking account. Meanwhile, daily spending and travel often move to a neobank, investing shifts to specialized apps, and Buy Now, Pay Later services cover retail purchases.

Each provider excels at one thing, but none of them own the complete relationship. And that creates a problem you can't solve with better rates alone.

The retail pattern: paycheck forwarding

In retail banking, the fragmentation follows a specific pattern: the paycheck lands in your account, then immediately flows somewhere else.

Here are some numbers:

• Chime holds over 22 million accounts in the US
• Revolut has surpassed 45 million users globally
• Apple Savings captured $10 billion in deposits within four months of launch - no branches, no bankers

Your account handles the payroll direct deposit. Their app handles the spending, the saving, and the daily interactions. You process the infrastructure. They own the relationship.

These players aren't replacing your bank. They're sitting on top of it.

Cornerstone Advisors found that roughly half of neobank users still consider their traditional bank their primary institution. They haven't left. They've just stopped using you for anything that matters.

You've become the plumbing. They've become the bank.

The pattern is particularly acute with younger customers. BAI research shows that Gen Z consumers are the most prolific account openers - and they're not consolidating them as they age, but adding to them.

And here's what makes this different from commercial or wealth banking: The switching cost is near zero. Moving daily spending takes thirty seconds and a new debit card.

PFI Status: what's actually at stake

When customers fragment their banking relationships, you don't just lose transactions. You lose something far more valuable: Primary Financial Institution (PFI) status.

PFI status is the strategic position that determines lifetime value. It is defined by specific, observable behaviors:

• Payroll direct deposit: the paycheck lands in your account.
• Bill payment: your bank is the operational center of their financial life.
• Daily transaction activity: frequent interaction, not dormant storage.‍
• Active mobile app engagement: they check you first.

If you don't have these, you don't have the customer. You have an account holder.

The economics of the top 10%

The difference between an account holder and a PFI customer is exponential.

StrategyCorp research shows that approximately 11% of accounts - the "Super" relationships - represent 67% of total relationship dollars in deposits and loans.

Read that again. The vast majority of your revenue is concentrated in the small percentage of customers who treat you as their primary bank.

Gallup's U.S. Retail Banking study found that fully engaged customers generate approximately $402 more in additional revenue per year compared to actively disengaged customers.

The cost of invisibility

When you lose primary status, you lose access to these economics. The account remains open. Balances may appear stable, but the valuable activities that drive profitability have quietly migrated elsewhere. Additionally, you'll be operating in the dark.

• You can't see when they get a salary increase.
• You can't see when they are preparing for a major purchase.
• You can't identify the right moment to offer a personal loan or wealth management services.

You become a utility: necessary, but invisible.

The margin compression context

This invisibility would be manageable if retail banking margins were growing. They're not.

McKinsey's State of Retail Banking report projects 5-10% margin compression through 2026 across retail banking, with roughly 70% driven by interest margin contraction. The tailwinds from recent interest rate hikes are temporary.

Meanwhile, winning new customers to replace the old ones is not a viable strategy. Customer acquisition costs in retail banking continue to rise, while the economics of reacquiring a lost primary relationship are significantly worse than retaining one.

You simply cannot afford to lose the primary relationship.

What retail banks can do now

This shift demands a different way of looking at retail banking relationships: not in terms of how many accounts exist, but in how deeply customers actually engage.

The questions that matter:

• How many customers use your bank for payroll and bill payments?
• How much day-to-day financial activity flows through your ecosystem?
• How visible are the life moments that shape long-term value?
• Are you the bank - or are you the plumbing?

Without this visibility, banks risk mistaking account presence for relationship strength. And in a market where Chime, Revolut, and Apple are one tap away, that mistake is getting more expensive every quarter.