Have you ever paid slightly more in ATM fees just because you were too lazy to cross the street to visit a bank with cheaper rates? You're not alone. Americans are in love with convenience, even if it fosters resentment about the cost.
Turns out a sizable chunk of Americans still want to get divorced from their big bank because of issues like high fees and poor customer service. A new report by Javelin Strategy & Research, a market research firm, showed that 11 percent of consumers surveyed said they want to dump their primary banking institution in the next year. And if a similar proportion of the American public follows through on this sentiment, that could represent at least $675 billion in deposits changing hands.
But if the recent past is any indicator, very few consumers will pull the trigger.
Last fall, there was a lot of talk about customers switching banks with the Bank Transfer Day movement. While the movement grabbed headlines and airtime, only 3 percent of banking consumers -- about 5.6 million people -- switched their primary financial institution when all was said in done, according to Javelin. And that statistic was on par with figures from earlier quarters that lacked the trifecta of Bank Transfer Day, Occupy Wall Street and public outcry over Bank of America's proposed $5 debit card fee.
Banks are counting on customers liking convenience more than they dislike paying fees. Financial institutions are also trying their hardest to create services to keep consumers tethered to their company, like automatic bill paying, online and mobile bank services and widespread ATM networks.
For consumers, "it sets up a conflict of being mad as hell, but not wanting to leave it behind," said Mark Schwanhausser, a senior analyst at Javelin.
Even for consumers who make a switch to a new institution, old accounts are not easily shuttered. Many banks will reopen a checking account if an electronic payment arrives for it even after its closing. Ultimately that creates even further disincentives for customers to switch banks.
This summer, banking at some institutions is about to become more costly, with higher overdraft fees and steeper minimum balances required for checking accounts. The latest wave of fees comes as banks struggle to replace revenue they previously had pocketed from overdraft charges (before new rules allowed customers to easily opt out of overdraft service). In the past, banks "had subsidized free checking on the back of overdrafts," Schwanhausser said.
But instead of engineering a bank switch, some consumers might just forgo banking altogether. The Huffington Post recently reported about Americans who live off the financial grid. The No. 1 reason suggested by many of these individuals for doing without a bank matches up with Javelin's research: too many fees.
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