I was born in Brooklyn in the early 90s. Upon learning how to walk, my first journeys were along 5th Avenue in Sunset Park. Gentrification seems to be planting its roots here now, but back then it was a sprawling ethnic community mostly comprised of immigrant families.

I remember knowing Anchor Savings Bank, the grey-columned edifice at the corner of 5th Ave and 54th Street, was a bank long before I understood the concept of a bank. It looked a lot like Gringotts, the fictional bank of choice of wizards everywhere, and still does. Theres something about its architecture that screams important money things happen here.

My mom had an account at Anchor. Wed walk there on random weekday afternoons (she didnt work at the time) to deposit cash my father brought home from his musical gigs over the weekend. Shed make note of the transaction by hand in a little booklet given to her by the bank. Sometimes shed check on her valuables stored in the vaults downstairs. It was all very physical, and so very different from the world of digital banking we know today.

Fast forward a few years, and Anchor Bank became Dime Savings Bank of New York. Wed moved to Staten Island in the late 90s, so I never saw what happened inside. Outside, the building still resembles Gringotts. Dime Savings Bank of New York was eventually bought out by Washington Mutual, which failed and in turn became part of the assets sold by the FDIC to JP Morgan Chase. Yup, today the very first bank I ever knew is a Chase branch.

Chase is, of course, one of the largest financial institutions in the world and the largest bank in America. This story of how my mothers local Anchor Savings Bank became Chase says a lot about banking as a whole. Mergers, acquisitions, and a few financial crises have reduced a once diverse industry to an arguable oligopoly. Its worth noting that JP Morgan Chase now resembles something more like a conglomerate of technology companies than the bank it once was.

All that said, community banks are still alive and well, and very much in the game. The Economist reports that although their numbers have been falling, small banks are in fair shape. According to the FDIC, nearly 5,000 community banks reported an average return on equity of 10.6% last year less than bigger banks, but nearly two percentage points more than in 2017 and the most since the financial crisis.

In the full article, The Economist suggests a simple explanation: they know their customers. Community banks have long thrived on the personal connections with their customers and communities, and many are still family-owned and operated businesses. Collectively, many of these banks form the Independent Community Bankers of America a small but solid coalition of local and regional financial institutions. According to The Economist, almost every congressional district across the U.S. is home to at least one ICBA bank.

The financial services landscape looks entirely different than it once did, and few could have predicted the impact of non-bank entities on the industry. The evolution is far from over though, especially as banks grapple with entirely new forces like cryptocurrencies. But no matter whats to come, banks large and small will likely figure out a way to evolve along with shifts in technology, the market, and consumer demand.

Weve recently launched a Community Bank Consortium to help local and regional financial institutions expedite digital transformation and remain competitive in a rapidly evolving banking landscape. As the financial services space continues to evolve to include new players, The Walker Group is dedicated to helping community banks navigate the complexities of the industry and identify the right partnerships to stimulate growth. Contact B MEDIA to learn more about the Community Bank Consortium and get involved.

Summary

Article Name

The Evolution of the Bank on the Street Corner

Description

The financial services landscape looks entirely different than it once did, and few could have predicted the impact of non-bank entities on the industry. The evolution is far from over though, especially as banks grapple with entirely new forces like cryptocurrencies.

Author

Bethany Frank

Publisher Name

PaymentsJournal

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The Evolution of the Bank on the Street Corner - PaymentsJournal