Bitcoin self-custody does not feel like it is increasing and Bitcoin self-custody wallets don't look like they are thriving, so I'm interested in ways we can use what banks and other financial institutions have already learned to increase adoption.
Banks make money when they are your BFF
There is a concept in banking called primacy: being the central financial relationship for a consumer. While consumers may use a wide range of financial services and apps, usually they have one primary banking relationship...and it's got a lot of inertia.
Changing your primary bank accounts is a huge pain in the ass and people don't like to do it.
According to a Deloitte survey of 3,001 U.S. consumers, more than half of all respondents reported that they’d had their primary checking account with their current bank for more than 10 years.
in the UK, where the government operates a service — the Current Account Switch Service — that is expressly designed to enable consumers to switch from one payment account provider to another in 7 days, only 1.19 million consumers switched bank accounts in 2024, which represented just 2.5% of eligible UK adults (by contrast, 12-15% of UK consumers move energy suppliers and 7-9% switch mobile phone carriers).
People don't like to change their primary bank accounts. I think Bitcoin wallets are similar. Maybe not so much for trying things out, but certainly for lightning and cold storage, once you set them up, it's pretty annoying to change software.
Concentrate on segments
One of the author's main takeaways is that banks should focus on appealing to specific segments (the main example of this in the article is Chime, which got it's start focusing on serving customers with less than $100k and seems to be thriving).
These segments could be defined around geography, occupation, affinity, or life stage.
This makes me think about the recent design bounty for building a "Skibidi wallet" -- at the time I didn't take it too seriously: I have no idea what skibidi means -- but perhaps the folks behind that bounty are really on to something. While it seems like so many wallet apps are trying to be a whole lot of things to a whole lot of people, there may be value in just trying to serve one very small segment.
Post script
One last note from the article is that the author is convinced AI is going to eliminate the inertia of switching. This isn't to say primacy will go away -- people may still prefer to use one main bank for their banking needs -- but those banks that are holding on to their customers purely through inertia and it being a pain to transfer are probably going to lose their market share.
Any business build on customer inertia will, eventually, go to zero.
I will also note that the article is a "sponsored Deep Dive" by a company called www.mx.com, which published a lot of the data the author used.