Bank Transfer Days, And Beyond

In a sense, the much-heralded “Bank Transfer Day,” designated as such for November 5, 2011, fit nicely into the overall narrative for the year just passed. We had monumental, activist-oriented, from-the-ground-up, socially networked movements around the world, from Arab Spring demonstrations toppling near-permanent fiefdoms in the Middle East to the multi-branched ‘Occupy’ rallies here at home. In that vein, moving accounts from large corporations to down-home non-profits seemed like an idea whose time has come.

As with those other movements, Bank Transfer Day was a consumer-driven initiative calling for systemic change—in this case, a voluntary switch from commercial banking conglomerates to non-profit credit unions. Prompted by one consumer’s decision to protest one bank’s customer service and debit card fees, the action was quickly propelled to a massive audience through spontaneous yet skillful use of social media. Even the date selected had a symbolic origin: November 5, commemorating Guy Fawkes, who was charged with attempting to blow up the British House of Lords in 1605. (That event has also permeated pop culture via films such as V for Vendetta and the eponymous masks worn by some Occupy protesters.)

It’s unlikely anything could live up to the hype, and in many ways Bank Transfer Day didn’t. Financial institutions across the board saw a flurry of activity for a short time, the larger banks still won’t tell how many accounts they lost, and a few credit unions are using the term in their marketing collateral. Otherwise, the movement seems to have faded from the public consciousness. Still, financial services professionals who dismiss the root causes do so at their own peril.

This is not your father’s banking industry. More than a singular protest, the factors roiling the market now are both more prosaic, and more revolutionary, than Guy Fawkes could ever be.

Consumers today have far more tools to conduct transactions with, far more options to choose from, and far greater expectations of each provider than even a few years ago. At the same time, new entrants to the market are building on innovative services to lure business away from big business. And of course, regulatory mandates, not to mention the pending potential of the Consumer Financial Protection Bureau, will add more pressure to the industry, and those institutions that don’t keep pace with are set to lose, even lose big.

Consumers now demand, and expect, high levels of transparency, flexibility, convenience and access. Banking used to be shaped by the act of walking into a branch or getting on the phone; today, it’s one of the most common online activities, and institutions are virtually required to develop personalized and otherwise customizable applications that meet a broad range of user needs.

Some have done this, but many others haven’t. There’s also a significant lag between user behavior and corporate accommodation, at least in some markets—while some larger institutions are still struggling to develop brand-specific mobile applications, many smaller providers have already embraced newer alternatives such as Remote Deposit Capture (RDC).

As the innovations keep coming, we’ll track them on this blog, warts and all. But the inescapable, irrevocable conclusion is that, far from the clamor of protests and rallies, consumers today have a quiet but powerful toolset to draw from, and they’re not shy about drawing from it to make a point, or even a transfer. That’s what change is all about.

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