Retail banking is constantly changing. The bank teller is now fading away, and is being replaced by a new, cheaper, more accurate computer. It is sad, but business. I would bet many of you do not even actually step foot in your bank.
Technology is rapidly changing the was you bank, but it is also indirectly affecting the bank you use. The great recession caused many bank failures and mergers, which we all know. But even as the economy is starting to take off, bigger banks are constantly purchasing smaller banks. When you factor in economies of scale, technology, and manpower, smaller banks cannot compete. Since the smaller institutions have more overhead, they must charge more for loans and keep deposit rates low, which obviously hurts their business.
I’m not saying there will only be one bank, but your small, local bank may not be there much longer if this trend continues. The sole purpose of bank employees, and all companies for that matter, is to increase shareholder value. If their share price is stagnant due to increasing expenses and stiffer competition, a merger looks very appealing.
Although only having a few national banks seems like a long way off, we are heading down that path very quickly. Thanks for reading.