Recently, I went to the neighborhood local bank and started a savings account. I did this after researching what the effects of such a move would make on myself, the community, and the bank. I have come to the realization that there is a very important place in the banking industry for local banks. This action is not simply a direct move away from the mega bank. Mega banks also provide a service to the consumer that local banks cannot such as multiple branches and ATM's. It is simply an action taken to provide business to local bankers who keep their plan simple and their mission clear to the community. I encourage everyone to at the very least take a look at your local bank to open up an account.
The savings account was opened for a few reasons. The realization that I will actually see my money at work in the community is exciting to me. Also, local banks make the most of their revenue from banking and stay away from making their profits from other sources like trading. This creates an absolute focus on the business of banking which the megas don't have anymore. The opportunity for future business with the local bank will be made a little easier as their decision makers are in the building.
The idea that my money will be at work providing loans to local businesses is a good feeling. That is the essence of the local bank that the megas cannot match. Since they have a large stake in the community, they will be right there to help when needed. For instance, there is a local bakery right near me that received financing from the local bank. You can bet that I will be frequenting that bakery regularly knowing that people in the neighborhood have put in almost all the equity into the business.
The local banks are focused on banking. The megas have shown a lack of focus on banking and more of a focus on trading. This is clearly evident in their use of TARP funding. It was used for trading profits while lending did not get even the slightest bump. Local banks provide that focus on banking because that is their main source of revenue.
The third reason why I opened the account is that I will actually get to know the bank at a very close level. The decision makers for the bank are either in the same building or at the very least same neighborhood as the tellers and the rest of the bank. That provides an opportunity to create a lasting relationship with individuals of a local bank that I would not have access to at the megas.
So remember to check out your local banks. They provide a laser focus on banking, look to be the principle lender in the community because they are part of the community, and show a level of access that the megas cannot provide.