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Checking account providers must understand the importance of digital and non-digital service attributes across different customer segments to achieve a product-market fit in digitalization. In particular, various latent personal characteristics influence customer choices in digital banking. However, there is only limited research on banking customer behavior beyond the technology acceptance model, and none that explores customer preferences for checking accounts experimentally. Against this background, we present the results of a discrete choice experiment on customer preferences towards checking accounts in Germany. The outcome of the paper is a detailed quantitative assessment of the relationships between checking account service attributes and a set of latent influencing factors on choice. While customer service experience, the scope of services, and professional expertise are identified as re-occurring critical aspects for customers when choosing their banking service provider, the type of provider and digital product innovation showed little impact on customer choice overall. In multigroup analyses, we reveal the moderating impact of influencing factors on the preference of checking account service attributes. Additional segmentation analyses point to six customer segments from which four still prefer a traditional operating model. The largest segment of traditional product-innovative customers prefers digitalized, i.e., data-driven checking accounts in a mixed-mode with human customer advisory and on-site branch services from a traditional bank. At the other end of the spectrum, a small innovative Fintech customer segment, influenced by non-pragmatism and social norms, prefers a purely digital operating model with data-driven applications in banking.

We explore dynamics of limited attention in the $35 billion market for checking overdrafts, using survey content as shocks to the salience of overdraft fees. Conditional on selection into surveys, individuals who face overdraft-related questions are less likely to incur a fee in the survey month. Taking multiple overdraft surveys builds a \"stock\" of attention that reduces overdrafts for up to two years. The effects are significant among consumers with lower education and financial literacy. Individuals avoid overdrafts by making fewer low-balance debit transactions and cancelling automatic recurring withdrawals. The results raise new questions about consumer financial protection policy.

Purpose - This study aims to investigate which variables can predict clients closing their checking accounts in a commercial bank and to validate the model used in this research.Design methodology approach - The theoretical basis of the study has contemplated satisfaction, loyalty, change mediators, switching costs and client retention. A total of 2,000 account holders plus 2,000 clients who closed their checking accounts were selected by simple probabilistic sample. The samples were probabilistic, without repetition, with an error margin of approximately 2.2 percent and trust interval of 95 percent with random drafting of the account holders' database from a large institution based in all Brazil. The variables were tested using the Binary Logistic Regression and the variables between the account holder and former account holder groups with indication of checking account closing request were compared.Findings - Account holder's age, time of the account, investor taker profile, internal relationship, long term assets contracts, risks in other banks, quantity of products, product canceling, average amount of entries and the existence of a joint client are the variables which better identify clients' propensity to end their relationship.Practical implications - The obtained results make it possible to identify the clients' propensity to abandonment and contribute to directing future marketing actions.Originality value - The model is relevant on the theoretical point of view because it can measure the importance of each independent variable and provides elements to compare all of them in the same base (meta-analysis). It deals with 14 independent variables and had a good adjustment once was capable to classify correctly 89.8 percent of the account holders and 87.2 percent of the former account holders. The K-S value was 79 percent with p<0.005 and value of ROC curve was 0.947. Models like this are unknown.

Information on borrower quality is a fundamental issue in debt contracting, corporate and consumer finance, and financial intermediation. We investigate the link between account activity and information production on borrower risk. Based on a unique data set, we find that credit line usage, limit violations, and cash inflows exhibit abnormal patterns approximately 12 months before default events. Measures of account activity substantially improve default predictions and are especially helpful for monitoring small businesses and individuals. Furthermore, early warning indications result in higher loan spreads, and in a higher likelihood of limit reductions and complete write-offs. Our study shows that account activity provides a real-time window into the borrower's cash flows, thus explaining why banks have an advantage in providing certain types of debt financing.

Inspired by the success of \"automatic enrollment\" in increasing participation in defined contribution retirement savings plans, policymakers have put similar policy defaults in place in a variety of other contexts, from checking account overdraft coverage to home-mortgage escrows. Internet privacy appears poised to be the next arena. But how broadly applicable are the results obtained in the retirement-savings context? Evidence from other contexts indicates two problems with this approach: the defaults put in place by the law are not always sticky, and the people who opt out may be those who would benefit the most from the default. Examining the new default for consumer checking account overdraft coverage reveals that firms can systematically undermine each of the mechanisms that might otherwise operate to make defaults sticky. Comparing the retirement-savings default to the overdraft default, four boundary conditions on the use of defaults as a policy tool are apparent: policy defaults will not be sticky when (1) motivated firms oppose them, (2) these firms have access to the consumer, (3) consumers find the decision environment confusing, and (4) consumer preferences are uncertain. Due to constitutional and institutional constraints, government regulation of the libertarian-paternalism variety is unlikely to be capable of overcoming these bounds. Therefore, policy defaults intended to protect individuals when firms have the motivation and means to move consumers out of the default are unlikely to be effective unless accompanied by substantive regulation. Moreover, the same is likely to be true of \"nudges\" more generally, when motivated firms oppose them.

Lower prices produce higher demand... or do they? A bank's direct marketing to holders of \"free\" checking accounts shows that a large discount on 60% APR overdrafts reduces overdraft usage, especially when bundled with a discount on debit card or autodebit transactions. In contrast, messages mentioning overdraft availability without mentioning price increase usage. Neither change persists long after the messages stop. These results do not square easily with classical models of consumer choice and firm competition. Instead, they support behavioral models where consumers underestimate and are inattentive to overdraft costs, and firms respond by shrouding overdraft prices in equilibrium.

The prevalence of depression in U.S. adults during the COVID-19 pandemic has been high overall and particularly high among persons with fewer assets. Building on previous work on assets and mental health, we document the burden of depression in groups based on income and savings during the first two years of the COVID-19 pandemic. Using a nationally representative, longitudinal panel study of U.S. adults (N = 1,271) collected in April-May 2020 (T1), April-May 2021 (T2), and April-May 2022 (T3), we estimated the adjusted odds of reporting probable depression at any time during the COVID-19 pandemic with generalized estimating equations (GEE). We explored probable depression—defined as a score of ≥10 on the Patient Health Questionnaire-9 (PHQ-9)—by four asset groups, defined by median income (≥ $65,000) and savings (≥$ 20,000) categories. The prevalence of probable depression was consistently high in Spring 2020, Spring 2021, and Spring 2022 with 27.9% of U.S. adults reporting probable depression in Spring 2022. We found that there were four distinct asset groups that experienced different depression trajectories over the COVID-19 pandemic. Low income-low savings asset groups had the highest level of probable depression across time, reporting 3.7 times the odds (95% CI: 2.6, 5.3) of probable depression at any time relative to high income-high savings asset groups. While probable depression stayed relatively stable across time for most groups, the low income-low savings group reported significantly higher levels of probable depression at T2, compared to T1, and the high income-low savings group reported significantly higher levels of probable depression at T3 than T1. The weighted average of probable depression across time was 42.9% for low income-low savings groups, 24.3% for high income-low savings groups, 19.4% for low income-high savings groups, and 14.0% for high income-high savings groups. Efforts to ameliorate both savings and income may be necessary to mitigate the mental health consequences of pandemics.

Banking the Poor explores level and determinants of financial access in 54 countries, mostly in Africa. It collects information from two sources: central banks and leading commercial banks in each surveyed country. It explores associations between countries' banking policies and practices and their levels of financial access, measured in terms of the numbers of bank account per thousand adults. It builds on the previous work measuring financial access through information from regulators, from banks, and also from users' perspectives in household surveys.

This paper presents several new stylized facts on what people actually pay to use their checking and credit card accounts. The median household pays $500 per year and could avoid more than half these costs with minor changes in behavior. Translating these avoidable costs into consumption terms, most consumers could afford to borrow more than 1,000 additional dollars simply by allocating payment choices more efficiently. Penalty fees are economically important (representing about half of total fees, and the lion's share of checking account costs), and most penalty fees are easily avoidable by the paper's metrics. Interest and avoidable interest generally persist over time; in contrast, fee and avoidable fee costs are negatively correlated over time for many consumers. Tremendous heterogeneity is found on all margins of costs and cost persistence.

We propose that stock-market participation is influenced by social interaction. In our model, any given \"social\" investor finds the market more attractive when more of his peers participate. We test this theory using data from the Health and Retirement Study, and find that social households-those who interact with their neighbors, or attend church-are substantially more likely to invest in the market than non-social households, controlling for wealth, race, education, and risk tolerance. Moreover, consistent with a peer-effects story, the impact of sociability is stronger in states where stock-market participation rates are higher.