Banking –The Illusion of Choice

I received a notice the other day from my personal bank in the U.S. that it was being acquired by another bank. I see reports of this happening all the time, but for my bank, this is the fourth time it has been acquired in the past 18 months.

Along with the notice from the new bank, I also received a welcome letter informing me about all the new services and extended capabilities, ATMs, and locations of the combined entity. Nice enough. According to the letter, I now have more “choice” in how and when I want to bank. All good, right? Not exactly.

As a result of this change, I have three new account numbers to manage, I must re-register for online banking, change my login and password (and remember it!), get new debit cards, checks—and not to mention that this impacts all of my automatic bill paying and direct deposits as well. On top of this, I had to drop by the branch to sign some paperwork, and it appears that the transition is causing some stress on the people as well—the same people that deal with my personal finances. Yikes! All this, and I still get near-zero interest on my deposits and my fees went up as well.

As I wrote previously in my blog, this consolidation is happening across the U.S. and Europe at an incredible pace. In the wake of this mass consolidation is significant upheaval for both consumers and businesses as they try to get things back to “normal” so they can get back to doing what they were doing before the interruption.

This is not a unique story, as it is happening everywhere. I am quite sure it will all eventually settle out just fine like the last three times, but in the meantime, it is a hassle to say the least, and there is zero advantage for the end-user in this transition. There is really no point in changing banks either, since my bank is <now> the biggest bank around, and with only four major banks owning the vast majority of deposits in the U.S. now, the choice of banking is merely an illusion.

Putting money under the mattress is looking better all the time.

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