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October 3rd, 2011 1:19 PM by David W. Welch
I believe what we are seeing in the economy today is an environment where some business models may have outlived their usefulness. Let's take banking. Banks grew larger and larger into regional then nationwide entities, under the auspices of offering convenient access to your money wherever you traveled. More branches meant more convenience for the consumer.
I recently had an occasion to meet a customer at a local branch of a very large bank. He had to pick up a cashiers check for a closing. It was nearing the bank's closing time, and I was not sure he would get there before they locked the doors. I headed right over and made sure they did not lock up before he arrived. I sat in this huge lobby - you could easily toss a football around in there. There were three tellers at the counter with no customers to serve. There were three other people in glass offices speaking on their phones and two other people just walking around. I have absolutely no idea what they were supposed to be doing. We know they are not making loans.
With online banking, ATMs that can recognize your checks and cash for deposits and withdrawals, how much do banks really need all these big buildings? I suppose they need some buildings somewhere to house the computers, but that is about it. Personally, I almost never have any cash on me and pay most everything online. All I really need the bank to do is keep track of my account balances and the transactions against those accounts. I really just need a bank that will offer those services at the lowest cost to me and maybe pay me some interest. My big bank just announced new fees - for all those people just standing around at the branch I guess - that will certainly effect my cost to do business with them. So, my wife and I are pulling our accounts and moving to a local bank. Convenience is everywhere with the internet, and I really don't care about personal attention, we are just looking for a bank that is not going to charge us to deposit our money with them.
Too big to fail has become too big to care, too big to matter, and probably just too big.