Thursday, November 3, 2011
Small Banks Gain from Occupy Wall Street
This article doesn't directly address the Occupy Wall Street movement, but instead looks at the implications that the movement is having on the banking industry. People are frustrated by the big banks and that frustration is manifesting itself across the financial industry. For example, that $5 a month fee Bank of American was planning on charging debit card users created a firestorm big enough to force many banks to temporarily halt a lot of plans for new fees. These banks are even more worried about an even bigger threat - losing customers. People who are tired of the giant banks are now flocking to smaller local ones. But smaller banks have their downsides too. It should be interesting to see if this trend lasts or if the big banks will eventually win back the trust of their customers.
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While it is clear that the Occupy Wall Street movement has hurt big banks and helped small ones, moving to small banks makes it a much larger hassle for customers to get money when they need it. Unlike large banks, there are not ATMs for small banks all over the country, making it easy to get cash. I feel that while the Occupy Wall Street movement will have some negative effects on large banks, a lot of people will keep their money in large banks for convenience and to avoid going through the hassle of switching banks.
ReplyDeleteAdding to the Alyssa's previous comment. Though small banks seem to stand to gain from the movement. The hassle of switching would really be too great. The comment on the lack of ATMs for local banks is where a lot of the problem will come from. To withdraw money, if the bank offers a debit card of their own, chances are you would have to use the ATM machines of big banks. This leaves the customer with extra charges which, unless the customer decides to hold out until he reaches a local ATM, would possibly match the monthly fees Bank of America proposed.
ReplyDeleteThese small community banks should connect their ATM machines across the country to benefit customers from different regions. However, even if they did this, I agree that many people will choose to stay with large banks for the convenience.
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