Bank statistics may not sound very exciting, but the way you choose to manage your money can make a huge difference. Whether choosing your next banking provider or deciding how much money to have on hand for emergencies, it helps to be in the know. Let’s dive in and examine these banking statistics.
1. According to the Fed’s latest data, the median checking account balance in the US is $3,400, while the median savings account balance is $7,000.
While the most recent (2016) Federal Reserve Survey of Consumer Finances shows average balances of $9,284.92 for checking and $15,634.67 for savings, the large gap between the average and median amounts indicates that the survey included some outlier accounts that are skewing the data, making the average appear higher.
These low balances could mean that many Americans would be hit hard by a financial emergency. In a 2020 survey by Bankrate.com, four in ten respondents said they would need to borrow money to cover a $1,000 expense. Not only that, the study found that in reality, the unexpected expenses actually incurred by the respondents over the past year averaged $3,500.
2. The average person in the US has approximately 5.3 bank accounts.
In 2019, an FDIC survey of 33,000 individuals found that 95.4% of American households were “banked,” meaning that they owned at least one or more bank accounts. This is the highest share on record, leaving the “unbanked” total at 4.6%. That equates to 7.1 million households in the US that hold neither a checking nor a savings account. The unbanked are generally using non-traditional ways to manage their money, frequently using options such as prepaid debit cards.
3. 80% of Americans would prefer dealing with their bank through digital rather than physical transactions.
Over the past five years consumers have grown to appreciate the ease and access of digital banking. Being able to pick up a phone, tablet, or laptop is frequently a better option than carving out time to stop by a branch during business hours. A study looking at the timeframe between 2014 and 2018 found that branch locations had decreased by 7%, with larger banks particularly closing more branches as they diverted resources to support increasing consumer attraction to digital outlets.
The mobile banking shift has only been accelerated by the COVID-19 pandemic. In April 2020, Fidelity National Information Services reported a 200% increase in new mobile banking registrations, and a 35% increase in mobile banking traffic.
4. 25% of consumers wouldn’t open an account in a bank that did not have a local branch.
Whether it’s the security of in-person interactions or the hometown vibe of a local branch, a significant number of people look for a bank with a physical and local presence. The 2018 Digital Banking Consumer Survey reports that a majority of people prefer to tackle complicated transactions like opening a new account, applying for a mortgage, or taking advantage of financial advisory services in an in-person setting. This is where local banks with a strong presence continue to shine in customer service and experience.
5. There are 5,177 FDIC-insured banks in the United States.
“An FDIC insured account is a bank or thrift account covered by the Federal Deposit Insurance Corporation (FDIC), an independent federal agency responsible for safeguarding customer deposits in the event of bank failures.” The FDIC was created in the 1930s in response to events that resulted from the market crash in 1929, launching the US into the era of the Great Depression. The FDIC is funded by premiums paid by the institutions they insure.
The FDIC insures accounts up to $250,000. Depositors looking to hold more than that amount should consider spreading their deposits between institutions to keep them protected.
6. The three banks with the highest market share by the value of domestic deposit are Bank of America, JPMorgan Chase Bank, and Wells Fargo.
The three banks held 10.67%, 10.35%, and 10.32% of U.S. deposits at the end of 2019. That amount represents $3.86 trillion, or somewhere in the range of the GDP of France. Banking with the largest players in the game comes with pros and cons. Consumers may trade some of the customer services of local community banks for better digital features and support. These banks have also been developing and cultivating banking technology from early in the trend toward online banking and may be more able to support the security needs of their vast group of depositors.
7. Cybercrime cost global financial institutions $18.4 million in 2018.
Cybercrime includes criminal activities that target computers, networks, and networked devices to pursue financial gain. Cybercrimes around the world are perpetrated by both individuals and groups, causing a terrible amount of disruption for both large and small companies. The crimes themselves may be at the level of the consumer, and include identity-theft and information-gathering schemes via email or phone. Criminals may also target banks at the company level, leading to high impact attacks suchs as large data breaches.
In studies conducted in 2018 and 2019, the cost of cybercrime was found to be shockingly high and growing. The global cost of cybercrime was estimated by the Center for Strategic International Studies to be approximately $445 billion. The same study notes that “the banking industry had the highest average annual cost in 2018—$18.4 million—up from $16.7 million in 2017, followed by utilities and software companies.” The cost of recovering from a single data breach was estimated to be $13 million per company affected.
8. Positive customer experiences influence 75% of customer decisions in banking.
As areas outside of banking have continued to elevate the customer experience in both digital and physical space, customers are conditioned to expect more out of all of their retail experiences, including those at the bank.
It is difficult to employ technology seamlessly in order to complement a consumer’s banking experience. However, providing an optimal experience is one of the most important factors in converting new customers. For those customers looking for that optimal experience, statistics show that companies only have one or two opportunities to make that conversion happen. According to one study, “Even if people love your company or product, in the U.S. 59% will walk away after several bad experiences, 17% after just one bad experience.” However, if institutions can manage to perfect the banking experience, they may be able to realize an upcharge to the consumer.
9. The average customer has stayed with their current bank or credit union an average of 14 years.
The good news for banks is that once a bank has turned an inquirer into a customer, it typically forms a long term relationship. Whether it’s online or in a local branch, the average consumer will remain with the same bank for more than a decade and will give the bank a little slack if the customer service is lacking on subsequent visits.
With the advent of digital interaction it has gotten easier to leave a bank, although users don’t seem to be taking the opportunity. A Bankrate study shows that consumers seek out a new bank in order to receive a better interest rate for their deposits or to gain lower account fees. The same study shows that customer service has seemed to improve across the board. The primary reason for consumer loyalty is perhaps much more passive than banks would like to admit: “Apathy appears as the basis for why they signed up and are hanging on to their bank accounts. ‘Merger,’ ‘inertia,’ ‘my parents signed me up as a kid,'” were among the written responses to the questions in the survey.”
10. In less than a decade, researchers believe the traditional bank will be a thing of the past.
In a study on digital disruption, Accenture researchers noted that they believe “the industry will split into utility providers, innovative digital banks (formed from old school universal banks) and digital disruptors.” In this new world, we’ll continue to see a decline in the number brick-and-mortar branches. As technology continues to be the default entry point for new customers, we’ll also see the ability of new online banking institutions quickly to build new products to target the specific needs of customers.
11. Almost 2,500 community banks are headquartered in counties with a population of less than 50,000.
The community bank is still alive and well in smaller counties across the country. These banks offer similar accounts and financial products as the large banks, but with a small-town feel that can cater to local tastes. While many small communities enjoy limited banking options, 50% of the small business loans in the US are still made by community banks.
Smaller organizations may enable local banks to be more affordable and sustainable. Smaller bank networks may be able to offer lower fees, tailored services, and locally-focused decision-making. Additionally, while a small bank may seem like an easy target for hackers, it is actually large banks that are more frequently attacked. The means a smaller, local bank may be further out of harm’s way.
12. The total assets of all FDIC-insured banks are over $10,000,000,000,000.00, or over ten trillion dollars.
Finally, the total deposits of FDIC-insured banks come in at the mind-blowing number of over $10 trillion. To grasp the size of that number, consider this: “The length of 1,000,000,000,000 (one trillion) one dollar bills laid end-to-end measures 96,906,656 miles. This would exceed the distance from the earth to the sun.”
This data may even now be out of date, as the coronavirus pandemic has caused consumers and businesses to alter their spending habits and send a windfall of cash to US banks. As CNBC reported in June, a “$2 trillion surge in cash has hit the deposit accounts of U.S. banks since the coronavirus first struck the U.S. in January.” Covid 19 may end up changing the banking industry even more than the digital revolution.