banks

Banks – Why So Many?
By Bob Clifford

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".