TROY, Mich.–Financial institutions are being hit by a new trend they likely aren’t even noticing: “soft switching,” according to a new J.D. Power report.
J.D. Power has published a report that has found large numbers of customers are quietly changing banks by opening second or third checking accounts at new financial institutions, and then, over time, gradually shifting their transactions and funds into the new account: thus, the soft switching.
“They find that they like the experience they’re having with the new account that they opened,” Miles Tullo, managing director for financial services at J.D. Power, said in a statement. “And before you know it, you have a customer who was banking with you for all of their banking needs and is now banking with someone else.”
Part of Broader Trend
“(Consumers) don’t close accounts or formally sever ties; they simply redirect their activity elsewhere,” J.D. Power said. “Soft switching reflects a broader trend of disengagement without drama. It’s subtle, but its impact is significant.”
According to the new quarterly J.D. Power Financial Services Churn Data and Analytics report, which tracks customer attrition among the nation’s leading financial services providers, many customers are expanding their relationships with additional banking, credit card and investment account providers, rather than switching providers.
Roughly half of new checking (52%) and investment (48%) accounts opened were additional accounts, and 65% of new credit cards opened were additional cards, J.D. Power said.
“While this phenomenon may not present as outright customer attrition, it is a harbinger of changing patterns of customer behavior that could hurt incumbent providers,” according to the company’s analysis. “In fact, many customers who open additional accounts are eventually making those accounts their primary. What’s more, it’s a non-traditional financial servicer – Chime – that is reaping the greatest benefit of this ‘soft switching’ trend among banking customers.”
The Soft Switch
J..D. Power reported that more than half of new checking accounts opened over the course of Q3 2025 were additional accounts, while 25% were replacement accounts and 23% were accounts opened by consumers who didn’t have a like account at the time they opened.
“Of the additional and replacement accounts opened, 72% were opened with a different bank than their previous account,” J.D. Power said. “That 72% is noteworthy because, while customers won’t necessarily close their old account, many are treating the newly opened account as their primary. Half (54%) of additional and replacement checking accounts opened with a different firm become the primary account.
Chime’s Market Share Emerges
J.D. Power stated that as customers consider new accounts, they are also considering a new type of financial partner. Of the new checking accounts that were opened in Q3 2025, 13% were with Chime, the analysis found.
“That rate outpaced all other banks, including national brands like Chase (9%), Wells Fargo (7%), and Bank of America (7%). Furthermore, Chime ranked fourth in attracting high-deposit customers with an estimated $1,000+ in deposits in the first year (8%),” J.D. Power said.
Chime also accounted for 7% of new savings accounts opened and 3% of credit cards opened.
J.D. Power said its survey found that consumers opening checking accounts with Chime say the top reason they decided to open a new account was due to a promotional offer (26%).
“They are also more likely than other banking customers to not have had an existing checking account at the time they opened the new account (20%),” according to J.D. Power.
A Deeper Dive
Other findings:
- Consumers are primarily choosing Chime due to convenience (41%), good reputation (35%), low/no fees (34%), and promotional offers (32%).
- Those switching to Chime are primarily driven by poor service experiences with their incumbent banks (37%).
- Chime customers are significantly more likely than others to say they value the ability to send/receive money (58%), online/mobile bill pay (50%), and a digital wallet (49%) when shopping for a new checking account, highlighting the importance of integrated banking and payments capabilities.
Dominant Conversion Rate
“Part of Chime’s success is a dominant conversion rate — the percentage of time the checking account was opened with the bank after being seriously considered. Overall, Chime has the highest conversion rate for customers that both considered opening checking (77%) and savings accounts (86%),” J.D. Power said.
According to the analysis, Chime is not only earning new customers from traditional banks, but it is also claiming market share from its fellow alternative brands.
“In fact, both SoFi and Cash App lose more checking account customers to Chime than any other bank through either silent attrition or switching, making it clear that Chime is differentiating itself among its fellow disruptors,” J.D. Power reported.
What’s Happening in Credit Cards
The new J.D. Power report also offers insights into what’s happening in credit cards, with the company reporting it found:
- 65% of new credit cards opened in Q3 2025 were additional cards for the customer and 10% were replacement cards.
- Of the additional and replacement accounts opened, 80% were opened with a different issuer than the existing or previous card.
- However, just 21% of these new cards become the customer’s primary card. “Still, the high rate of opting for a new issuer does suggest customers are actively seeking better offers or additional credit and are less loyal to their current issue,” the company said.
- Most customers did not seriously consider multiple providers when opening a new credit card (79%). “This suggests that customers are not shopping but instead going directly to their new issuer because the rewards, fees/rates, and sign-up offers meet their needs.”
Soft Switching of Investment Accounts
J.D. Power said the survey also found investment accounts are not immune from the soft switching trend.
“Overall, 48% of new investment accounts were additional accounts and 15% were replacement accounts, with 56% of these accounts being opened with a different provider than their previous account,” J.D. Power said. “And just like banking accounts, eventual attrition becomes a factor. Half (51%) of new additional or replacement investment accounts opened with a different provider eventually became the customer’s primary account. This indicates that customers may be consolidating assets or making significant changes when opening new investment accounts.”
The survey found customers opening new investment accounts did seem to favor more established, well-known brands, with Fidelity leading the way by capturing 13% of new accounts opened, followed by Charles Schwab (9%) and J.P. Morgan Wealth Management (7%).
“However, SoFi’s performance is noteworthy. Not only did SoFi account for 6% of new accounts opened, but the company boasts an 80% conversion rate,” the analysis added.
Attracting the Motivated Customer
With market headwinds creating a tenuous time for many customers in the U.S., J.D. Power said banks, credit card issuers, and investment firms need to be aware of the soft switching phenomenon.
“Unlike traditional churn, soft switching occurs when customers quietly shift their activities to a new provider—without formally closing accounts or cutting ties. They simply open a new account and work with multiple providers concurrently,” according to J.D. Power. “For banks and issuers that want to stay ahead of the curve, the way customers are choosing to shop should inform a strategy. Chime’s conversion rate is a good indication that customers are going into their search knowing exactly what they’re looking for.
“By gleaning insights into what causes financial services customers to start looking, and ultimately open an account with a new provider, banks, issuers, and investment firms can attract a new crop of motivated clientele,” the analysis added.
