Why is bank loyalty dying? Listen to the folks around my dinner table
The competitive dance for depositors is changing quickly. With competitors pushing rates, terms, and technologies to outcompete incumbents, here’s one family’s perspective on the future of their banking and saving relationships – with some hints about approaches that could save banking’s moat.
No one can blame an institution or depositor for guarding their self-interest. Banks’ liabilities are depositors’ assets, and vice versa. Yes, they operate on opposite sides of the desk for deposits. Except they don’t exactly: Most banks want loyal customers, not depositors who act like vendors who sell funding. The banking “relationship” is an art of balancing profit maximization with genuine care for customers’ success.
At dinner last Sunday evening, as the family’s banking journalist, I was asked to defend the latter. If I put it into a single question, my family was asking:
Do the products and pricing offered by banking institutions now and during the past year reflect a real effort to provide relevant deposit options?
Now, granted, different institutions approach deposits in different ways. And a single family doesn’t make a rigorous study. However, trends in banking data support the opinions voiced around the table. They had two candid questions:
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