“What’s the profile of people who left large banks for Bank Switching Day?”
A number of you have asked Javelin the question “What’s the profile of people who left large banks for Bank Switching Day?”.
Surprisingly, we see no evidence to suggest that these bank-switchers were predominantly young, low-income hipsters. In fact, the surprising finding from our survey of 5,800 people is that those who left large banks in favor of a credit union or community bank because of November 5, 2011 Bank Switching Day actually trended towards *higher incomes*! Mostly, they just looked like everyday Americans but perhaps with a slightly fatter wallet. I love being surprised by data!
While traveling around for purposes that range from speaking at banking events to personal work I visited several Occupy Sites, sometimes interviewing the predominantly-young people there. I wasn’t at all surprised by our recent research finding that a moderate-but-statistically-significant 610,000 individuals actually moved their money from large to small FIs during (and becuase of) the period around Bank Transfer Day. I knew there was real movement afoot, yet my interviews told me that may Occupiers had significant concerns over the general downgrade in electronic capabilities that awaited them at a community institution. Our quantitative data speaks to this in spades, showing that the average credit union or community bank has around ten percentage points fewer young adults than the typical large bank. In general, some young idealistically-minded people might love the small banks and credit unions, but data show young people (in particular) love the technology at large banks even more. In fact, our data clearly show that smaller financial institutions are beloved by all Americans, yet our benchmarking analysis show that the larger players are delivering on specific emerging capabilities that include mobile, social, online and even the best ATM or branch ratings. At Javelin we’ve even coined a phrase for this: “the Occupier’s Dilemma”.
How do we solve the Occupier’s Dilemma? First, let’s all drop any notion that banking should be free. Apple doesn’t make free products and Google rakes in tons of cash so it is bankers who need to get more creative with an audience that is willing to pay for always-on, real-time and transparent services. Bankers also need to move from a revenue that is primarily punitive (such as overdraft, insufficient funds, etc) to one that is proactive (this especially applies to larger banks), in order to actually get people feeling good about paying more for more. Second, institutions need to identify the specific capabilities that are causing younger and even more affluent people to leave them, or risk going the way of the Oldsmobile. It’s a myth that banks and credit unions are in some sort of high-dollar arms race in which only the largest players have enough coin to win. By taking a precision approach to identifying particular technologies that give a competitive edge when empowering the individual with more proactive control over what happens to their deposit, payment, investment and other financial accounts, financial institutions can make money by creating prosperity. The good news for institutions large and small is that the answers are contained in the data (easy for me to say, because I stare at it all day!)
If I’m idealist on this notion of shared-prosperity than blame it on factual research data, because that’s what I draw my conclusions from. There is opportunity and need aplenty, folks.

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