Why it's not that great that everyone is flocking to their online bank
Online banks are winning the deposit wars, and this should be on all our radars.
Of course, this is no surprise given the banking turmoil earlier this year, but while it may seem like the obvious move to go with a big name bank like JPMorgan, Wells Fargo or Citibank, smaller and regional banks are key to the US financial ecosystem., which include things ranging from office buildings to strip malls to warehouses. And any pullback in lending by smaller banks could hurt small and midsize businesses, as well as borrowers who are located far from major cities and urban centers.
"Regional banks have a combination of regional knowledge and expertise that makes lending more efficient," C. Michael Zabel, a former executive at M&T, the Buffalo-based regional bank,Broadly, regional banks are staring down two main headwinds. First, the trust of their customers was eroded after the banking crisis, pushing them to start keeping money at.
This can be seen in shifting deposits. In the first quarter, Ally Financial and Goldman Sach's Marcus online bank saw them rise, while regional-bank powerhouses like US Bank, Truist Financial, and Citizens Financial saw deposits fall,
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