Money Moving Away From Big Banks?
An interesting trend in banking is underway with deposits
beginning to move from the largest US Banks to local community
banks and credit unions. While some of the movement is occurring
naturally due to dislike of "too big too fail" banks after the bailout
the "move your money" campaign started by Arianna Huffington
and friends is having an impact as well.
According to the Huffington Post and Moebs Services Research
firm over 4 million accounts have already moved with predictions
for another 7-9 million accounts to move by the end of 2011. The
Move Your Money Project encourages individuals to divest from
the nations largest Wall Street banks to local financial institutions.
(MoveYourMoneyProject link)
Since smaller banks tend to lend more to the local community it
helps support the local economy and business in the area. This
movement seems to be a part of an overall trend not just in banking
but in the green movement too. Buy local produce and products to
save energy and support your local businesses. Of course online
banking is green as well since it means less trips to the branch.
Coming from an online banking proponent I would say that many
of the smaller banks and credit unions have improved their
technology and services over the years. And in the past, I
remember starting with small banks and watching them get eaten
up in a food chain that bubbled back up to one of the big boys.
Then there is always the question of security. Are the small local
banks as secure as the Wall Street Banks? They certainly don't
have the resources to invest in security like the big guys and the
recent hacker trends are starting to take advantage of that fact. On
the other hand, we still have seen security breaches at the big
banks as well.
Finally, what about convenience? Mobile banking apps, iPad apps,
P2P payments, Contactless payments... all the exciting changes
coming out. Small banks aren't usually the ones to make this
happen first. The good news is that the technologies seem to be
getting commoditized quicker and are becoming available through
third party vendors quicker. For some, this still may be a
consideration.
And why not consider someone like USAA? Not really small, but
not to big to fail and great services, security and technology and
they do good for our service members in the military. (Note: Other
than account holder there is no affiliation between USAA and
myself).
Overall, we know that moving your money from any bank is not
easy . But if you decide to jump on the bandwagon there is a lot to
consider. One of the best ways we can make a political statement
or really express our opinion is by choosing who we wish to
patronize. Online banking expert and innovator Jim Bruene of
NetBanker made us aware this week that a new bank startup is
getting ready to offer a new way of banking for those of us who are
tired of the way banks operate today. The startup is named
MoveNBank which is a reference to it's intent to create a banking
platform built from the ground up for Mobile and Online Channels.
As former Chief Software Architect and CIO at VirtualBank and
having built an online only bank from the ground up back in 2000
during the initial revolution I can tell you it is not easy. One major
difference from then is that Mobile Banking was only a ToDo
sometime in the future at that point since the technology was not
ready yet.
MoveNBank was founded by banking pioneer Brett King author of
the book Bank 2.0. When Bank 2.0 was published back in March
2010 I was excited to have an ally in my efforts to move banking
into modern times and considered it the bible of the future of
banking. At the time, I was floating the idea of a new bank account
for mobile and online only. This may help explain my excitement
for MoveNBank.
While details are still limited at this point we do know that a
private beta is to begin soon with a soft launch around July 2012. It
will be exciting to see what the experience will be and how the
vision is executed. I must applaud Brett King for not just writing a
book about how to make banking better but actually stepping out
to the edge and making an effort to move it forward. We all know
that big business moves slow until some innovator or revolution
comes along and makes it happen.
Bank Simple is another one of those start ups working to improve
online and mobile banking experience and they are reportedly
beginning to test a small batch of bank cards with their employees
after announcing it a year ago. We all have our eyes on that launch
as well.
We will keep you posted as we monitor MoveNBank and Bank
Simple progress in their efforts to drive the future of banking.