A growing trend in the banking sector, dubbed “soft switching,” is emerging as a significant shift in consumer behavior. According to a recent report from J.D. Power, a substantial number of customers are quietly transitioning their banking relationships, opting to open a second or third checking account at a new financial institution rather than fully switching their primary accounts. This shift, characterized by a gradual movement of funds and transactions into the newly established account, is gaining momentum and is reshaping the competitive landscape for banks.
The report, released in October 2025, reveals that nearly half of all new checking accounts opened in the third quarter of that year were supplemental accounts, initiated by individuals who already held one or more accounts with existing financial institutions. This indicates a willingness among consumers to maintain a relationship with a traditional bank while simultaneously exploring alternative offerings. Notably, many of these new accounts eventually become the customer’s primary banking relationship, highlighting the increasing openness consumers are exhibiting toward exploring different banking services. The average American continues to hold onto a single bank account for roughly 17 to 19 years, suggesting a level of established loyalty while simultaneously presenting opportunities for innovation and disruption.
Several factors contribute to this “soft switching” trend. The rise in consumer choice, fueled by a proliferation of financial services and technological advancements, plays a crucial role. As consumers are inundated with promotional offers and digital banking options, the ease of opening a new account has dramatically increased. “We as consumers are inundated with choice across the various things we engage with,” noted Miles Tullo, managing director for financial services at J.D. Power. “It’s easier than ever for us to take advantage of that choice.” The trend also reflects a growing dissatisfaction with the experiences offered by established banks, prompting customers to seek out alternative services that better meet their needs.
Chime, a financial technology company known for its fee-free banking services and innovative approach to digital banking, has emerged as a major beneficiary of this shift. According to J.D. Power’s report, Chime achieved the largest share of new checking accounts opened in the third quarter of 2025, surpassing prominent players like Chase and Bank of America. This success is driven by Chime’s strategic focus on providing a convenient and accessible banking experience, appealing particularly to everyday consumers. “Chime has a very specific strategy that speaks to the majority of Americans,” Tullo stated. “And they’re saying, ‘We have a better experience for you.’” The company’s tactics, including the ability to access paychecks before payday and a streamlined mobile app, have resonated with a large customer base.
Ryan King, cofounder of Chime, articulated the company’s motivation: “We founded Chime to serve the millions of everyday people earning up to $100,000 a year – the ‘unhappily banked’ who’ve not been well served by traditional banks.” This sentiment underscores a critical observation: consumers dissatisfied with their existing banking experiences are actively seeking out alternative solutions. Furthermore, the “conversion rate” – the percentage of potential customers who actually open accounts – for Chime was a remarkable 77% in the third quarter, the highest among all institutions tracked in the J.D. Power study.
Experts often refer to Chime as a “neobank,” a term describing financial technology companies that partner with traditional banks to deliver banking services, but operate independently through digital platforms. “This is a new-ish kind of alternative to a lot of the big banks,” explained Ted Rossman, senior industry analyst at Bankrate. “They’re kind of meeting people where they are, in terms of technology.” Ultimately, consumers are choosing banks based on convenience, as found by J.D. Power, and smaller numbers cited reputation, lower fees, or promotional offers. The report, based on 84,019 responses gathered in August and September, reveals that this shift demonstrates a willingness among customers to experiment with different financial products and providers.
