For the last two decades, banks did not have to worry much about product design, says David F. DeFazio, who is a partner with StrategyCorps. All they had to do was offer free checking, and the business model would work.
But today, that era is ending. We are entering a new epoch of tech checking. Tech checking is when mobile is connected with payment cards and online banking. The big banks have discovered tech checking and have found it to be highly profitable. They are currently involved in a “mobile banking arms race.”
Community banks need to respond to this situation. More than 75 percent of the people who switch banks end up with a big bank. The reason 65 percent of these people give for switching to a big bank is that the big bank has better mobile services.
DeFazio was interviewed about tech checking and mobile banking at the recent ABA Bank Marketing Conference in Denver.