The news: TD Bank will let Canadian customers transfer money from another financial institution (FIs) directly through its app, per a press release—with funds arriving in near real time. 

This builds on the Digital Direct Deposit tool TD launched in August, which helps customers move their paychecks to TD.

Why it matters: Banks know that simplifying the onboarding process could peel off customers who are mainly hanging onto their banking relationships because switching feels like too much work (11.2% in the US, per EMARKTER’s survey data).

To that effect, U.S. Bank introduced Payment Switch, which lets customers move recurring bills and subscriptions to their U.S. Bank cards without visiting individual merchant websites. Combined with its own Easy Switch platform, it removes key obstacles that prevent customers from switching banks.

Recommendations for banks: Banks that make customers manually transfer funds, redirect deposits, and update payments will find themselves at a disadvantage against competitors offering a simpler experience.

Banks can also use these capabilities to turn customers’ secondary accounts into primary banking relationships, increasing deposits and deepening customer relationships.

Banks should make easy-switching a central part of marketing campaigns that target competitors’ customers. Pairing messages about hassle-free transitions with competitive rates, lower fees, or sign-up incentives could help convince dissatisfied consumers who have been reluctant to leave their current banks.

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