The banking industry has been seeing a major push toward smaller, regional banks and credit unions, a shift that has thus far prompted no action from the big banks, but has pushed credit unions to capitalize on the widespread dissatisfaction that new fees, the mortgage crisis and continued bonus pay have generated.
Credit union aggregate sites have reported an eightfold traffic increase in the last few months alone, demonstrating a real awareness for credit unions among customers who may have only recognized or been aware of major banks even just a few months ago. The online information is often the only way to find the information, as airwaves are dominated by major corporate advertising that marginalizes smaller organizations.
The major impetus for such a shift is the recent slew of bank fees being introduced across almost all major banks, as part of a “testing period” to determine what amount could be charged that would generate revenue for the banks, but remain so small that the fee will not be annoying enough that clients bail and move on to greener pastures.
Unfortunately for the major banks""some of which have announced charges of $20 a month to use a debit card""this has proven to be enough of a nuisance, or the final straw, which has pushed clients toward other businesses. Many credit unions charge no fees at all, and offer vastly superior rates than most banks, starting with a number instead of a decimal point.
Many credit unions have understandably been reporting record numbers of membership applications, as interest reaches an all time high, a welcome shift that will likely mean a permanent change for most customers. If they were annoyed at banks before, the only way they™ll switch back is through outright bribery, with superior interest rates and better service. But since the credit unions consistently beat the big banks at this game, it™s hard to imagine anyone will ever regress to the major institutions. And word of mouth is likely to continue unabated, as these switchers profess their fandom for the institutions.
Though there have been some concerns, such as whether the industry will be able to absorb the massive influx of new customers, or whether they will be able to sustain the better interest rates given the larger number of clients to whom they must pay the dividends, and whether the growth will trigger the same evolution among credit unions that caused banks to become so useless, but so far the issues seem to be tolerable. The last issue, if the institutions retain their non-profit status, is especially likely to work in favor of the credit unions and their customers.
Capping these events is the upcoming Bank Transfer Day, set for November 5th, on which tens of thousands of people have announced their intention to close their banking accounts and take their business elsewhere. It is more likely to be the start of a major shift rather than a singular event (especially with the sometimes extended period transfers like this require), but it could end up being rather momentous.
The banks have every reason to worry, or at least expect to scale down to become nothing more than investment firms, if such trends continue.
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