Breaking up just got a little easier to do for banking customers, but it has little to do with innovation and everything to do with frustration.
New debit card fees are motivating consumers nationwide to say they will call it quits with their banks, according to new research from Research Intelligence Group. In fact, the consulting and market-strategy firm reports that roughly one-third of all consumers say they will leave their bank, should it charge a monthly fee for using a debit card. The data compliments an earlier BankRate survey that also found consumers would consider fleeing new fees.
Naturally, saying and doing tend to be two very different things for people. Unless there’s big money involved, consumers’ laziness will likely trump their discontent with their FIs. The more likely outcome of Durbin-inspired checking account fees, though, is that some consumers will change their payment habits as a means of coping, which the research results also indicated. In fact, 43% of consumers polled said they would be more likely to shift to other payment methods rather than run away from their current banks, found Research Intelligence Group. To us, that means the payments landscape is ripe for innovations. If people are willing to change up how they pay for things, alternative payments could feel more usage love. With one large caveat: Consumers slipping into old payment habits. Indeed, 28% of respondents said they’d have a stronger likelihood to pay with cash, while 15% said they’d pay with their credit cards.
Alex and I have simplified the marketing elements. It is more complicated than that. The challenge for the big four banks is that they now have a bull-eye on their backs. Any writer that wants to take a shot has an easy target and there are so many arrows in the quiver that can be shot, that it will be decades before the big banks have any chance of recovery. I have been shooting in this blog for almost 3 years and not once has anyone from a big bank responded with any support against my comments because I can document everything I state.
Remember that Maslow heirarchy that was taught in school and in so many counselor selling programs? Esteem is the 4th level. It will be difficult for anyone working at a big 4 bank to have any sense of self-esteem or respect. There will be no “fun” working at a big four bank. It will only be a job and not a “life”. It will be like working as a minion for Darth Vader. Only the people earning the big bucks (or people earning more than they are worth) will have money to kiss but it never kisses you back!
The point of my original comment is that there is opportunity for vendors to be innovative and round up enough community banks using the same IT provider and quickly replicate any product introduced by a big bank. The competitive advantage of “Lag Time” can be offset by shooting arrows into Darth Vader. I can provide at least 2-3 dozen easy arrows anytime that anyone wants them but that is not the purpose of this post.
Most community banks were founded by a few local people with 6 and 7 figure extra cash that wanted the opportunity for respect (being a community banker did have respect at one time) and a chance to earn a good return on a business with a low failure rate. Their customer base grew by referral and the treatment articulated by Alex.
I would think a good long range plan would be to market on college campuses to mine the rage that the students have because they will have a lower quality of life thanks to Wall Street. Most of them were abused via plastic fees by the big banks for starters.
It is too late now, but I used to do that with the Navel Academy at Annapolis. Most every cadet year (about 1200) was my customer and they made good salaries (officer level) and never missed a payment on a loan. That innovation was tightly targeted marketing and pre-approved credit – not any electronic/IT service but there are all types of opportunities. Later on some banks put branches on aircraft carriers! Lots of personnel in a carrier battle group. More than most community banks have as customers!