Account Activity

What Is Account Activity?

Definition – Account activity is the activity that a person or business does with their money. Account activity helps banks determine how lucrative a business or consumer is: their level of customer loyalty and demand additional services and products. Account activity generally indicates how well the customer is using their bank account. Account activity is simply what’s going on in your financial accounts every day.

Understanding Account Activity

Account activity can be measured by opening new credit accounts or purchases of stocks and shares. Every time you take a new credit card, write checks for your paycheck or deposit money into your bank account, spend money at places that allow credit cards (gas, car rentals, restaurants), or set up automatic transfers from your paycheck into your savings account, your activity creates a trail of activity that can be tracked and used to reward your customers. 

Account activity is a term used in financial services and refers to the number of times a client communicates with an institution about their account. The closer this communication is, the more likely it is to offer an attractive interest rate or fee reduction. In some cases, particularly for larger firms, account activity can be an important factor in determining which credit product will be offered to a client. 

Account activity tracking can help identify and reward clients who spend less with you, save more, or engage in new positive behaviors. This activity can be tracked in a variety of ways, including by analyzing historical spending patterns, monitoring account balances via online activity, or even utilizing blockchain technology

Account activity is a key part of a rewards program. If your account stays active–putting money in the bank but also making deposits and withdrawals regularly–then you’ll be rewarded with higher amounts of money. However, if an account becomes dormant or has not been used for several months–perhaps because you never used it–then you might not get as much out of a rewards program.

Most consumers don’t think about their behavior when choosing rewards, so they don’t track their own reward choices very closely overall. Still, this data can help instigate better-spending decisions or help the average consumer bridge the gap between paying off debt and building savings over time.

Account activity is now about more than just a balance or direct deposit into an account. Accounts that are low-activity may still offer a higher rate than accounts that have a lot of activity. However, the best accounts will offer benefits for maintaining a high level of activity regardless of the level of activity. One of these benefits is increased transparency regarding your spending trends and resulting rewards.

Account activity is important because it can affect an individual’s credit score or the overall health of a consumer’s credit score.  Frequent account activity can also put other users at risk of bad debt or even be used to extort money from them.

Example of Account Activity

XYZ offers a lucrative new customer incentive program dubbed Cash Back, giving new customers cashback on their first $100 of purchases with no limit. However, unlike normal rewards programs, this one forces users to keep their accounts actively used by making it easier for them to get approved for new credit by creating a tracking sequence on each account. Specifically, if the new customer has no new purchases on their account within three months of opening their account, they won’t qualify for the cashback offer. On the other hand, if they’ve made three or more new purchases within the first 60 days of account opening, they’ll qualify for the offer as long as they maintain an active profile

Summary

  • Account activity is a term used in financial services and refers to the number of times a client communicates with an institution about their account.
  • Account activity is a key part of a rewards program.
  • Account activity is important because it can affect an individual’s credit score or the overall health of a consumer’s credit score.