ClickSwitch, a U.S. fintech that claims it simplifies and automates the switch of direct deposits and recurring payments for financial institutions’ new and existing account holders, recently acquired $2 million through its Series B investment round led by USAA subsidiary. The investment round brings ClickSwitch’s total funding to more than $21 million.
ClickSwitch describes itself as an automated account holding acquisition technology provider for financial institutions and fintechs. The company aims to simplify the process of bringing new depositors onboard by quickly, safely, and efficiently switching their deposits and recurring payments from their old accounts to new ones.
Cale Johnston from ClickSwitch claims that banking challengers are only interested in handling direct deposits now. He reveals that banks have become more aggressive when it comes to onboarding new customers.
As reported by Tearsheet, ClickSwitch has been helping customers of challenger and traditional banks with switching over their direct deposits to their new accounts.
As banking challengers continue to focus on acquiring more customers, they’ve also started to provide better services to their existing clients (so that they can continue to earn their business). Digital banks and other financial service providers are now being judged or evaluated on whether these new account openings can actually turn into new clients. Financial institutions are also being assessed on whether their new customers can rely on them to provide comprehensive banking services.
ClickSwitch aims to assist large challenger banks and incumbents with converting new account openings into loyal customers. The Fintech firm’s proprietary technology has been designed to help new customers with seamlessly switching over their direct deposits and bill pay to their new banking service provider.
The ongoing competition between digital banking solution providers has started to mature. The Fintech and banking industry is not only focusing on acquiring new customers. They also want to onboard and provide quality services to consumers that have already signed up. Banking challengers are making substantial investments into getting a new customer to consider their new digital accounts as their primary bank accounts.
Cale Johnston, founder and CEO of ClickSwitch, says that customers are able to easily open new checking accounts. He adds that banks are sort of forced with this “dilemma” as to how they can identify a primary bank account holder.
One way to check how engaged a customer might be with a service provider is to see if they’ve got their direct deposit set up. ClickSwitch aims to assist challenger banks and incumbents with figuring out which of their customers are primary bank account holders and are not just maintaining inactive checking accounts.
ClickSwitch’s platform and services can integrate with banks in order to interact with customers directly after they’ve signed up for a new account. ClickSwitch’s management explains that the company uses data aggregation to show new account holders they’ve got a direct deposit of their paychecks setup.
The Fintech company claims that it has a fast approval process, after which customers are ready to move their direct deposit to the new account via integrations with payroll processors.
ClickSwitch claims that it’s currently working with more than 500 financial institutions, which includes some of the largest banking challengers.
In statements shared with Tearsheet, Johnston noted:
“It’s not just about direct deposit — it’s about the downstream effect, as well. Creating the ROI metrics for our financial institutions has been critical in getting us in the front door of our 500 clients and signing 10 to 15 new net financial institutions a month right now.”