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Community Banks Miss Growth Opportunity in 2010

May 17, 2011

Last year free checking disapeared in 13.6 percent of the Wall Street banks, leaving  about half with free checking services – according to the research firm Moebs Services.  Clearly large banks were struggling in 2010, and some may argue that community banks and credit unions did not fully capitalize on the opportunity.

“There are 130,000,000 consumer checking accounts in the United States. In 2009, large Wall Street and Regional Banks with deposits over $50 billion enjoyed about 45 percent of this market. About five million accounts in 2010 shifted from large banks to community banks and credit unions.” – iStockAnalyst article (see below)

Just by offering free checking, many customers are migrating to smaller institutions.  What can these institutions do to attract more consumers?

Will these same individuals be saying the same thing about 2011?

“By the end of this year, we expect community banks and credit unions will have 65 percent of the checking account market. To paraphrase Mark Twain, ‘the death of free checking has been greatly exaggerated,’” said Moebs. “From July 2010 to February 2011, community banks offering free checking increased by one percent and by nine percent at credit unions.”

May I suggest to community banks and credit unions to spend the marketing dollars required to advertise free checking.  The opportunity is ripe to attract the bigger bank consumers.  I can certainly understand that budgets are tight right now and that many can not justify spending extra marketing dollars for this initiative.  One way to clear up extra money in the budget is to outsource your workforce optimization efforts.  By properly staffing the right number of tellers at the right time throughout your branch network, you can save up to $30,000 per branch, per year.

Excerpts taken from the article Wall Street Banks Continue to Drop Free Checking, Lose Market Share to Main Street Institutions

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