It may seem daunting to go up against the advantages of a megabank, but, like every fabled giant, megabanks have their weaknesses. These are the areas in which your local financial institution can shine.
Flexible and Customized Products
Due to their size and national presence, megabanks offer standardized products. Community banks, on the other hand, have the ability to customize their services and products to match the needs of their community. Larger banks often won’t change their menu of services to be community-specific and are slow to adapt to the economy and consumers’ desires because of corporate red-tape. Community banks also do better when it comes to fees, a common source of customer frustration with megabanks. Overall, local financial institutions offer more free accounts, charge fewer fees, and often provide better interest rates. In 2012, U.S. PIRG reported that only 24% of big banks were offering free checking compared to 63% of small banks. So while megabanks may provide the convenience of an extensive ATM network, local banks can compete by offering free out-of-network ATM usage and/or reimbursements of a certain amount of ATM fees charged by other banks.