The push and pull customers experience from the banking sector is becoming more of a tale full of sound and fury. The rise of challenger banks, with lower levels of overhead cost (as a result of fewer or no branches, employees, etc.), and more attractive consumer fee schedules and requirements are only beginning to have an impact. It is evident that awareness of the possible savings through fee avoidance and reduction has not filtered through the wider marketplace.
Since there is little pushback by customers, US banks feel they have no compelling reason to relent on the high fees anytime soon, according to another bank expert.
Mercator Advisory Group expects the ability for more Fintech companies to venture in to the banking space directly via a chartering system currently underway, combined with more a rising trend in consumers willing to move their accounts to avoid high institutional fees will eventually compel legacy financial institutions exacting higher fees to become more competitive. But it remains in the hands of the consumer to take action to protect their own. It will take a wide consumer migration to lower fee financial institutions, and the will take effort from a broad swath consumers. Legislators making it easier to move one’s accounts to another FI, much in the way we move our phone number, would be one way the consumers would be empowered to let the market work to reduce fees.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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