Bank Consolidation Benefits
There are some bank consolidation
benefits for consumers and businesses as financial institutions continue to merge. One of the reasons
that banks consolidate is to eliminate the competition as in any other
industry which may not benefit consumers. Also, banks sometimes consolidate to access domestic or international
capital and to better compete with other larger banks to acquire and retain customers.
Lastly, as banks consolidate they can expand their services while reducing their
operating costs of managing multiple institutions.
Below you will find a list of some bank consolidation benefits for businesses and their customers.
List of Bank Consolidation Benefits
- Reduced costs - When banks consolidate, they reduce their operating costs which ultimately should reflect in the fees charged to customers. One of the major costs for banks is the regulatory compliance. As banking becomes increasingly regulated, bank owners, as well as their boards of directors and senior management understand that regulatory compliance is one of their biggest and costly challenges. Although small community banks are not the intended targets of banking regulations, they must still comply with dozens of regulations. Therefore, from a banking management standpoint, consolidation makes sense to reduce the costs and efforts associated with regulatory compliance which ultimately results in one of the bank consolidation benefits for consumers. Of course, there are many other areas where consolidation also helps reduce costs such as systems, offices, people, and devices.
- Quality of services - When banks combine their services, they also consolidate their resources and talents which ultimately improve the quality and efficiency of services.
- Less passwords to manage - Bank consolidation can occur voluntarily or involuntarily by consumers. Our accounts can be consolidated under one company as a result of mergers and acquisitions or we can consciously select and consolidate accounts and credit cards managed by one company. Either way, as consolidation occurs, we can set up our accounts to be accessed from one web site for online account monitoring. Identity theft management is also one of the main bank consolidation benefits to consumers.
- Speed of bill payment - It is not difficult to also expect and observe faster processing of payments made from our checking account to pay our bills as more often the accounts owned by one company perform inter-account transactions. In other words, the company transfers money from one account such as checking to another account such as credit card, both of which are owned by the same company.
- More money in our pockets - As inter-account transactions speed up as a result of bank consolidation, the money stays in our control for a longer period of time allowing us to earn more interest on the money that would be otherwise tied up in the lengthy payment processing. In other words, as payment delivery time shortens, we get to keep our money longer and hopefully invest or keep in a saving account that pays interest.
- Less statements - In some cases as banks consolidate, our accounts also consolidate. Not only this provides an opportunity for the banks to reduce their costs of printing and mailing the account statements, it also provides consumers an opportunity to reduce the amount of paperwork they have to deal with and monitor.
- Efficient account monitoring - As accounts consolidate as a result of bank mergers, consumers can review their multiple account activities in just one account and therefore reduce the amount of time they spend reviewing account activities, and, be more efficient in detecting fraud.
Return to the identity theft blog after reading the "bank consolidation benefits" article.