Here’s one of my most favorite statistics of the last few years. In the past 90 days, since “Bank Transfer Day” in November, 5.6 million people have moved their money out of banks. 610,000 cited Bank Transfer Day as the reason. This research comes from the consulting firm Javelin Strategy.
Bank Transfer Day and the Occupy Movement have received tremendous attention, and for the first time we have market research data to measure the impact on the financial services industry. Javelin’s research estimates that 5.6 million U.S. adults with a banking relationship changed providers in the past 90 days. Of those switchers, 610,000 US adults (or 11% of the 5.6 million) cited Bank Transfer Day as their reason and actually moved their accounts from a large to a small institution.
People switch bank providers for a host of reasons, we cannot attribute all the switches to a Move Your Money type of campaign. Maybe you moved and your old bank doesn’t have a branch in your new area. But Javelin Strategy adds that this level of switching is three times the normal rate. And one-quarter of all transferring customers cited high fees as the reason for their switching.
This is significant. Account closures are up at Bank of America and the other big banks. They can put a brave face on this and say they actually lose money on small accounts, so this is a relief to them, but that’s really just bunk. We’re talking about tens if not hundreds of billions of dollars in lost deposits. Surely nobody on Wall Street would tell you that they couldn’t do anything productive with that money.
It took a few years, but Move Your Money looks like a real movement. We’ll have to see if it continues.