Tired of Bank Fees? Try a Banking Subscription

If you are unhappy with seeing a list of bank fees on your monthly statement, you might want to consider a banking subscription.  Some neobanks – banks that operate primarily online – are replacing monthly fees, including overdraft fees, with a subscription-based pricing model. How does this work?  Why may banking subscriptions be attractive to both individuals and financial institutions?


Recasting Fees as Subscriptions

Mounting fees are a source of dissatisfaction for banking customers. Banks’ efforts to reduce costs are not making a dent in reducing customer dissatisfaction, according to consumer research firm J.D. Power.[1]


To combat customer dissatisfaction, some neobanks are recasting fees as subscriptions and are marketing memberships as time and worry-saving features. Neobanks may offer different subscription pricing tiers that may include services such as free ATM withdrawals, no overdraft fees, foreign currency exchange, and higher interest rates.


Consumers may prefer the subscription model because it has a predictable cost instead of surprise charges that may disrupt a customer’s financial plans.  It may also allow customers to have more control over what to pay for and when.


Why Banks Might Want to Offer Subscriptions

Creating customer satisfaction is one of the main reasons why banks may want to offer subscriptions.  This is particularly true among younger customers.  J.D. Power noted that younger customers are more attracted to the neobanks subscription model.[2] 


From a marketing perspective, a subscription model may enable banks to market their products as having no fees.  This can serve as a potentially attractive point of differentiation from traditional banking firms.  It may also allow banks to offer a simplified product, which often is preferable to customers than a long list of customized options, according to The Financial Brand.[3]


Financially, subscriptions may prove to be more lucrative than fees.  According to The Financial Brand, people generally overestimate their usage of a product.  Think of your gym membership.  Banks may be able to entice individuals to consolidate their banking relationships under one institution and charge them a monthly subscription fee that will likely exceed the value of the services offered.


Not Just Banks

It’s not just banks transitioning to a subscription model.  Some wealth management firms are also adopting subscription platforms.  For example, Charles Schwab has an automated investment platform that, for $30 per month, builds and manages client portfolios.  Wells Fargo offers a hybrid robo-advisor for a subscription fee of 0.35%.[4]



Banks and financial services companies are not immune from the subscription economy trend.  The subscription model may allow banks to increase customer satisfaction while potentially appealing to a new demographic segment.


The Fount Subscription Economy ETF (SUBS)

The Fount Subscription Economy ETF (SUBS) seeks to provide investment results that, before fees

and expenses, generally correspond to the total return performance of the Fount Subscription

Economy Index.  The Index was designed to measure the performance of companies engaged in the business of providing subscription services, i.e., companies that sell products or services for recurring subscription revenue.


SUBS may invest in companies that offer subscription-based pricing models, including those in the technology hardware industry.



For a list of fund holdings, please click here.




[1] Choo, Lindsey, Banks Need to Start Cashing In On the Subscription Economy, Protocol, 4/28/22

[2] Protocol

[3] How Innovative Bundled Banking Subscription Models Make More Money, The Financial Brand, 2022

[4] Mansard, Michael, Why Subscriptions Are Key to the Future of the Financial Services Sector, Financial Derivative, 4/14/21

Bong-Geun Choi Chief Economist

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