Money Moving Away From Big Banks?

An interesting trend in banking is underway with deposits beginning to move from the largest US Banks to local community banks and credit unions. While some of the movement is occurring naturally due to dislike   of "too big too fail" banks after the bailout the "move your money" campaign started by Arianna Huffington and friends is having an impact as well.

According to the Huffington Post and Moebs Services Research firm over 4 million accounts have already moved with predictions for another 7-9 million accounts to move by the end of 2011. The Move Your Money Project encourages individuals to divest from the nations largest Wall Street banks to local financial institutions. (MoveYourMoneyProject link)

Since smaller banks tend to lend more to the local community it helps support the local economy and business in the area. This movement seems to be a part of an overall trend not just in banking but in the green movement too. Buy local produce and products to save energy and support your local businesses. Of course online banking is green as well since it means less trips to the branch.

Coming from an online banking proponent I would say that many of the smaller banks and credit unions have improved their technology and services over the years. And in the past, I remember starting with small banks and watching them get eaten up in a food chain that bubbled back up to one of the big boys.

Then there is always the question of security. Are the small local banks as secure as the Wall Street Banks? They certainly don't have the resources to invest in security like the big guys and the recent hacker trends are starting to take advantage of that fact. On the other hand, we still have seen security breaches at the big banks as well.

Finally, what about convenience? Mobile banking apps, iPad apps, P2P payments, Contactless payments... all the exciting changes coming out. Small banks aren't usually the ones to make this happen first. The good news is that the technologies seem to be getting commoditized quicker and are becoming available through third party vendors quicker. For some, this still may be a consideration.

And why not consider someone like USAA? Not really small, but not to big to fail and great services, security and technology and they do good for our service members in the military. (Note: Other than account holder there is no affiliation between USAA and myself).

Overall, we know that moving your money from any bank is not easy . But if you decide to jump on the bandwagon there is a lot to consider. One of the best ways we can make a political statement or really express our opinion is by choosing who we wish to patronize.