Banks - Why So Many?

Summary: Does it seem like there is a bank on every corner? It does to me. Everyone needs a bank and everyone's banking needs are different thus we see new community banks, state chartered banks and nationally chartered banks doting our landscape. Banking is a very personal activity and people constantly look for an environment that they feel comfortable in. The result seems to be another new branch of an existing bank or a new bank opening up on your corner. What are your banking ...

Does it seem like there is a bank on every corner? It does to me. Everyone needs a bank and everyone's banking needs are different thus we see new community banks, state chartered banks and nationally chartered banks doting our landscape. Banking is a very personal activity and people constantly look for an environment that they feel comfortable in. The result seems to be another new branch of an existing bank or a new bank opening up on your corner. What are your banking hot buttons? Is it the convenience, consistent customer service, familiarity with staff, product selection or maybe rates. Usually there are a combination of factors that will lead you to develop relations with a bank. If all banks met all needs there probably would only be about eight large banks in the country. Banking can be a profitable business. It is federally and state regulated so it gives a certain sense of security to investors. The risk level is reduced so there always seems to be a good supply of investors available for start-up banks. Two key factors in the success of that new bank opening up down the street from you may be the leadership of that bank such as a CEO who is well known, respected and has a long-term successful community presence. The second factor would be a board of directors and investors that have a strong net worth, believe in the mission of the bank and make a personal significant investment. Staying power is key. Many businesses and individuals follow their banker from bank to bank. Many times the path will lead to an existing or new community or small regional bank. Clients' desire for personal banking relationships continues to drive the opening of the new neighborhood bank. The advances in technology have allowed the new banks to play with the big boys and deliver the type of services that are being demanded by their clients. An example would be on-line banking which reduces the inconvenience issue. There is a tremendous amount of wealth in the United States. That fact will continue to drive the expansion of existing banks and start up of new ones. The owners of that wealth constantly look for a combination of factors from their bank such as understanding their needs and meeting their service expectations. Demand will continue to drive the supply of new banks. Hence, a "bank on every corner".