Consumer Law

Big Banks May Be Doomed

By Sam Glover

Big banks “routinely treat their customers like shit, offer terrible services, and use inscrutable fee schedules to make billions of dollars per year from worthless fees alone,” according to Ramit Sethi. He’s right, of course. And big banks are gearing up new fees to make it impossible to bank without piling up absurd fees.

Fortunately, there are alternatives. Many online banks offer fair terms, convenient access, and great value. And they are getting popular. Twenty-two percent of bank customers under 30 use an online bank as their primary bank. Of those currently using a big bank, over 35% would not choose it again.

I don’t use an online bank as my primary bank. Yet. But the reasons people prefer them are pretty compelling. Free ATMs anywhere. Deposit checks using a scanner instead of making time to get to a branch. Better online interfaces. Better interest rates. And on and on.

When you subtract the culture of ripping off consumers and the overhead of brick-and-mortar branches, banking can apparently be a pleasant experience.

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Full post as published by Caveat Emptor on August 09, 2010 (boomark / email).