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Banks- what’s next?

September 23, 2009

Thanks to the FDIC, people don’t have to worry about the security of their bank deposits, which in turn means banks don’t really have to worry about their brands. Despite the events of the past 12 months and the lack of trust in Wall Street and banking, the bank brands don’t really have to pay the ultimate price of losing customers.

It’s clear moves are afoot to try and regulate the hyper money-making activities of the banks such as mortgage backed securities and the regulators seem to be taking a fast and critical look at Flash Trading and Dark Pools. These new moves by legislators are going to challenge the ability of banks to make serious money.

This journey therefore leads to retail banking, where banks need to find new ways to make money. Nothing wrong there, but the approach so far is typical for brands that don’t have any accountability; charging fees for everything. This year, banks are on track to make close to $44 billion from these fees. However, Congress today, came down hard on this activity and forced a couple of the major players to make changes.

There’s nothing wrong with adding new sources of revenue, but overdraft fees seem too easy.

As bank brands focus more on retail operations, perhaps one maverick banking brand will emerge, one that starts to look for new and interesting ways of adding services, that not only generate revenue, but unlike overdraft fees, add value to the consumer. 

Posted by Ed Cotton

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