Rethinking customer acquisition, transaction relationships and distribution in a changing banking market.

Banks have traditionally approached growth through a combination of customer acquisition, balance-sheet expansion, product penetration and increased share of wallet. The underlying logic is well established. Acquire customers with attractive financial profiles, establish a primary banking relationship and increase the value of that relationship as their financial requirements develop.

That logic still works. It just misses a growing share of today’s opportunity.

In developed economies, the competition for established banking customers is intense. Most consumers already have access to banking services, payment instruments and digital channels. In the United States, for example, 95.8% of households had a bank or credit union account in 2023, according to the FDIC. For banks seeking growth, customer acquisition frequently means winning business from another financial institution rather than bringing someone into banking for the first time.

Sources  FDIC, National Survey of Unbanked and Underbanked Households

Banks typically pay less attention to timing, meaning when in a customer’s economic life the relationship begins.

A customer’s current financial position does not necessarily reflect their longer-term commercial potential. The gap is widest for people entering a new economy, starting their professional careers, establishing businesses or moving into less conventional forms of employment.

The question for banks is whether their acquisition strategies adequately recognise these transitions, and whether they are establishing relationships early enough to benefit from them.

Looking beyond the customer’s current financial profile

Consider a professional relocating to Canada or the United States.

On arrival, the individual’s domestic banking needs are straightforward. They need a transaction account, payment facilities, a card and perhaps international money-transfer services. Their local credit history may be limited, and their initial deposits may not be particularly significant.

By conventional acquisition measures, this looks like a modest opportunity.

However, the same customer could establish a professional career, accumulate savings, purchase a home, invest and eventually start a business. Over time, the relationship could extend into mortgage lending, wealth management, insurance or commercial banking.

Not every customer will follow this progression. However, there is a commercial difference between a customer with limited financial potential and one whose potential has yet to develop or become visible. Each probably needs a different approach to lifecycle management.

The demographic opportunity is large. Canada’s 2021 Census recorded approximately 8.36 million immigrants, representing 23% of its population, although many arrived years ago and are already banked; the more relevant flow is the several hundred thousand new permanent residents Canada admits each year. In the European Union, 4.2 million people immigrated from outside the EU during 2024, while another 1.5 million moved between EU member states. The United States hosted nearly 1.18 million international students during the 2024/25 academic year, though new enrolments fell sharply in autumn 2025.

These figures represent different measures of mobility rather than a directly comparable banking market. But they do show a steady flow of people whose financial relationships often need to be established or re-established in a new country.

There is also a longer-term business-banking dimension.

According to the OECD, immigrants represented approximately 17% of the self-employed population across OECD countries in 2022, compared with 11% in 2006. Most of that rise reflects the growing number of migrants rather than a greater propensity to start businesses, but the pool of migrant business owners is still expanding. In countries including Canada and the United States, immigrants are more likely to be self-employed than the native-born population.

Sources  OECD, International Migration Outlook 2024

Banks should track how customer cohorts actually progress, not judge them on opening balances alone.

The same consideration applies to international students entering employment, younger customers beginning their careers, and individuals transitioning from salaried employment into entrepreneurship.

For banks, this comes down to customer lifetime value and when to acquire.

A customer who generates limited revenue during the first two years of a relationship may still offer attractive economics over a longer period, provided the bank can retain the relationship and develop it profitably.

That requires a different approach to segmentation, acquisition investment and relationship management.

The financial relationship may begin with a transaction, not a banking product

Banks have traditionally placed considerable importance on establishing the primary account relationship, particularly through salary credits, deposits and recurring payment activity. These do remain important indicators of customer engagement. But for customers who are new to an economy, the first real financial interaction does not always take place through a conventional account-opening or salary-banking journey.

An international student’s first transaction is often money from parents overseas. For a migrant professional, it could be transferring savings into a new country or remitting money to family members. For a gig worker, it may simply be a weekly payout from a delivery or ride-hailing app.

These transactions are often treated as separate financial-service requirements, with business cases built around transaction fees, FX income, processing costs and volumes.

That approach is appropriate when evaluating the profitability of the payment service itself. It underestimates what the service can do for acquisition and long-term growth.

Take international remittances. Banks and specialist money-transfer providers compete on pricing, speed, convenience and payout coverage. In many corridors, margins are already under considerable pressure.

Hence the relevant opportunity for a bank may extend beyond the remittance transaction. If the service encourages customers to establish their primary account, receive income, maintain balances and use other banking products, its contribution to the relationship can far exceed its standalone profitability.

This does not justify subsidising an unprofitable product indefinitely. The incremental value must be demonstrated through customer activation, account primacy, retention and subsequent product adoption. It also raises questions about how banks value recurring payment flows. The transaction that establishes the banking relationship may be worth more than the income generated by that transaction.

Customer acquisition may increasingly involve businesses outside banking

For decades, banks have relied on branches, direct sales, employer relationships, referrals and, more recently, digital acquisition channels to attract customers.

These channels remain relevant. But the customers I am describing often establish commercial relationships with other businesses before they develop substantial domestic banking requirements.

A university may engage an international student months before arrival. An employer or relocation company may be involved in moving a professional to another country. A telecommunications provider may establish a customer relationship before the individual opens a local bank account. A gig platform may become the principal source of income for a self-employed worker.

Each of these is a possible front door for a bank. The initial service can be simple: a stored-value account (mobile money wallet), a payment instrument, an international transfer facility or a disbursement facility.

The longer-term objective would be to establish a banking relationship that can develop as the customer’s financial circumstances change.

This is where embedded banking comes in, though the case has to go beyond putting financial products inside someone else’s app. The bank must assess whether the partnership delivers customers it would otherwise struggle to acquire, whether acquisition costs are genuinely lower, and whether it can retain a meaningful share of the customer’s financial activity. Then come the harder questions: who owns the customer, how revenue and data are shared, and who answers to the regulator.

Large customer bases and extensive distribution do not automatically translate into successful banking businesses. Orange Bank shows why. The French telecom group launched it in 2017 and signed up around two million customers in France and Spain, close to half of them reportedly insurance clients rather than account holders, but it reportedly lost more than €1 billion. In 2023 Orange announced its withdrawal from retail banking. Owning the customer relationship did not make the bank profitable.

The commercial case must therefore be established independently for each partnership model.

Different markets will require different approaches

These opportunities will not develop uniformly across geographies.

In North America and much of Europe, where banking penetration is already high, the opportunity may lie primarily in acquiring relationships earlier, improving financial-product relevance and increasing customer lifetime value.

Latin America is different. According to the World Bank’s Global Findex 2025, approximately 70% of adults in Latin America and the Caribbean (excluding high-income economies) had a financial account in 2024. The region has experienced substantial growth in digital financial services, although access and usage differ considerably between individual countries.

Sources  World Bank, Global Findex 2025

In some markets, expanding access to financial services remains a significant opportunity. In others, competition is increasingly about transaction activity, customer engagement and the ability to offer a broader range of banking products.

The experience of mobile money in Africa is a very good case study to learn more about, but not a template that can be replicated globally. Mobile money succeeded in many African markets by addressing gaps in banking distribution, payment infrastructure, access to financial services and the security risks of carrying cash. Those conditions are materially different where customers already have several banking and payment options.

Distribution reach counts for little unless it fits the customer problem being addressed, the existing financial infrastructure and the economics of the proposed service.

A model that succeeds in one market cannot be assumed to work in another simply because the underlying technology is available.

Rethinking the economics of banking growth

Banks should not abandon conventional segmentation or acquisition strategies.

For established customers, lending, deposits and wealth management will continue to drive a substantial share of banking profitability.

My argument is that banks are overlooking opportunities by concentrating acquisition investment primarily on customers whose commercial value is already apparent and, where they do acquire customers early, by failing to retain them through the transitions that create that value.

A better approach tracks cohorts over time: how their income, balances, borrowing and business ownership change.

Early acquisition also has to beat the alternative of waiting. A bank could let a customer’s value become visible and then compete for the relationship. Being early pays only if the bank becomes the account where income lands and everyday payments happen, because that is what makes switching inconvenient. As digital onboarding and open banking make switching easier, that advantage has to be earned through usefulness rather than assumed through inertia.

It also needs discipline. Customer lifetime value cannot simply be assumed from demographic characteristics or future earning potential. The costs of acquisition, retention and service, along with credit losses and capital, have to be counted. There is also a possibility that not all of the customers will actually move into higher-value products, and the bet pays off only if the value created by those who do exceeds the cost of acquiring and serving the whole cohort.

So the objective should be to identify customer segments where acquiring the relationship earlier produces superior risk-adjusted returns over time. Banks also need to know which initial financial services and distribution channels are most effective in establishing those relationships.

For some segments, the entry point may be a transaction account. For others, it may be a remittance, an international funding arrangement, a payroll service or a payment facility embedded within another commercial relationship.

Banks that can identify these entry points and develop the customer relationship beyond the initial transaction may find additional sources of growth that are not fully reflected in traditional product-level business cases.

Four questions banks should answer

Four questions follow from this, and I take up each one in a separate article.

First, customer value. Are banks adequately recognising the future commercial potential of customers whose current financial profiles appear relatively modest? I look at this in The Customer Banks May Be Undervaluing.

Second, transaction relationships. Can recurring payment activities, particularly international remittances, become effective channels for acquiring and retaining primary banking customers? I look at this in Remittance Is More Than a Money Transfer Business.

Third, distribution. As customers increasingly interact with non-financial businesses at important stages of their economic lives, should banks reconsider where and how relationships originate? I look at this in The Next Banking Relationship May Begin Outside a Bank.

Fourth, business-model relevance. What can developed markets learn from mobile money and financial-service partnerships elsewhere, and why have some models succeeded while others have struggled? I look at this in Why Mobile Money’s Next Chapter Will Look Different.

Banks have always known the value of acquiring customers early and keeping them. What has changed is how many kinds of customers, transactions and channels can now start that relationship.

The banks that grow fastest will be the ones that work out when a relationship should start, and what it takes to keep it.

Banks should settle that question before the next round of competition for established banking customers makes acquisition even more expensive.

Explore Comviva’s digital wallet and payments platform, mobiquity® Pay, built to support digital wallets, mobile money and payment experiences across markets.

Continue reading: The Customer Banks May Be Undervaluing