Viewpoint: Big Banks Focus on Fees, Not Customers' Needs

PHOENIXVILLE, Pa., Sept. 25, 2012 /PRNewswire/ -- The following is a statement from Warren Taylor, EVP and President of Community Banking at Customers Bank:

Anyone who saw the front page of Monday's Wall Street Journal – and who has personal experience with the fee-raising policies and practices that some of the nation's largest banks have engaged in over the past few years – must have had a similar reaction.

Right there on the front page was the in-your-face headline: 'Free' Checking Costs More: Banks Boost Minimum-Balance Rules, Fees as New Regulations Squeeze Revenue.

It's no wonder "trust" continues to be a huge problem for the banking industry.

It wasn't long ago that "gotcha" fees and excessive penalties spawned open revolts by consumer groups urging Big Bank customers to transfer their accounts to credit unions and smaller community banks.

Now the Big Banks are betting that people's memories are short. According to the Wall Street Journal story, fees are being raised on ATMs, overdrafts and checking accounts for customers who don't meet new, higher minimum standards for account balances or regular deposits.

The message that these Big Banks seem to be sending to their customers is: "Show us the money – we need more fees so we can sustain our financial institution."  Many Big Banks have grown overly reliant on "fee income" and they keep needing more of it in order to exist.

As head of community banking at Customers Bank, I think they have their priorities backwards.

A longstanding tenet of our philosophy has been to provide simple to understand and use products, low (or no) fees, and a consistently high value proposition for our customers on loans and deposits yields.  We believe an efficient, well-run bank can prosper by providing its customers with financial products and services that the customer wants and needs – and not by trying to sell customers overpriced or unnecessary services or levy unwarranted fees just to increase revenue for the bank.  We believe every piece of business we do with a customer must be win/win – where both entities are happy with the transaction and relationship.

Our approach places a high priority on efficiency (low operating costs) and customer focus – we call it our "high tech, high touch" approach. As part of this effort, we continually introduce new and reliable technology – such as our recently announced Remote Check Deposit service – with the goal of making banking as effortless as possible by allowing customers to deposit checks for free with their smartphone (iPhone or Android) instead of making a trip to the bank and without having to phone some distant call center in another time zone (or country). 

Our ability to provide such technology means there is less need for physical bank branch locations. That streamlined infrastructure helps us minimize operating costs, which lets us offer more competitive rates and provide more services to our customers. In fact, Customers Bank has been at the forefront of the movement toward fewer, more efficient branches.

Some time ago, the Big Banks made a conscious decision that more is better. So they built up huge infrastructures, with hundreds or thousands of branches, all offering an array of services and programs that many customers don't want or need. As a result, they need to come up with new revenue streams or continually increase fees in order to sustain these huge infrastructures. 

We take a different approach. Instead of paying landlords for branches, we pay our customers via higher deposit rates. Furthermore, our rapid growth confirms our belief that customers want simplicity, convenience, and value – no "gotcha" fees, no hoops to jump through, and rates that are consistently better than our Big Bank competitors.

So if you're a Big Bank customer and you've finally had enough, remember – you do have options! And if you decide to make a change, we'll make it as effortless as possible!

About Customers Bank
Customers Bank is a community-based, full-service bank headquartered in Phoenixville, Pa., with assets of about $2.3 billion.  A member of the Federal Reserve System and deposits insured by the Federal Deposit Insurance Corporation ("FDIC"), Customers Bank provides a full range of banking services to small and medium-sized businesses, professionals, individuals and families through branch locations in Pennsylvania, New York and New Jersey. Committed to fostering customer loyalty, Customers Bank uses a High Tech/High Touch strategy that includes use of industry-leading technology to provide customers better access to their money, as well as a continually expanding portfolio of loans to small businesses, multi-family projects, mortgage companies and consumers. Customers Bank is a subsidiary of Customers Bancorp, Inc., a bank holding company based in Wyomissing, Pa.

SOURCE Customers Bank