Small businesses are hailed as being able to provide a better customer experience, which has been a primary focus for new non-bank financial services companies. Meanwhile, their novelty poses a barrier that will keep these non-banks at a small size, which happens to be a great thing for customers.

As non-banks are likely to pose viable competition to traditional and online banks, the exact path of this new anti-bank style of conducting personal finances remains a mystery. But, if I were a customer of such companies, I’d prefer that they stay a niche market – far, far away from ever becoming major players in the “too big to fail”-wary banking industry.

Bringing It on Themselves

The megabanks have certainly lit a flame that repels consumers who are prepared to leave any second. After much consumer protest against debit card fees, banks may appear to be the bad guys – driving ex-customers to friendlier places to keep their money.

But, in the eyes of many Americans who are accustomed to the traditional form of banking, non-bank financial companies resemble the up-and-coming neighborhood with which the young and restless tend to be associated.

Folks with plenty of money place greater trust in financial institutions with the personal touch, not just the live human voice that one gets over the phone, but the face-to-face interaction. That’s something that non-banks are far from providing (if ever).

So, non-banks will cater more to the population with less-established finances, which is likely to be the younger crowd, and will therefore contribute to hindering their own growth potential.

Small and Nimble

There is no doubt that Americans are veering towards financial account management through mobile devices.

Innovators looking to revamp the culture of consumer banking has to pay attention to the the mobile frontier. Superiority in this field has been a focus for banks in the past year.

However, because larger institutions have to worry about smooth operations and security when dealing with new technology, they must take more time to pilot such features before offering them to the masses.

Just look at how long Bank of America® – now the second largest bank in the U.S. – will take to release the highly-demanded mobile check deposit feature, which is slated of the second quarter of 2012. USAA Bank, which is less than 5% the size of Bank of America®, has offered that service since August 2009.

It makes the case that being small is an attractive trait for non-banks that aim to be on the forefront of having the coolest tools that consumers can use to manage their money. They can tweak their business models more quickly to keep customers happy.

Currently, non-bank financial services companies such as Perkstreet Financial, Simple, Movenbank, and SmartyPig are making a name for themselves but it’ll be interesting how they fare if and when they amass a sizable customer base, possibly filled with consumers who’ve conjured up higher and higher expectations.

Follow Simon in the Community and on Twitter: @simonzhen.

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