What’s New in Banking

Nearly a quarter of the adult U.S. population is “underbanked.” This
means they don’t regularly use a bank (or a bank’s mobile/online capabilities)
to deposit checks and pay bills. That’s about 55 million people ostensibly
living from cashed paycheck to cashed paycheck.1

When these underbanked people cash their paychecks for immediate funds to
buy groceries and pay rent, they are more likely to use the services of a check-cashing
business. These services often charge a flat fee or take a percentage cut for
cashing checks, and that can add up. For example, some payday lenders take as
much as a 10% cut for cashing a check. That means if you’re cashing a $500
check, you could pay $50 for the service.2

There’s also such a thing as being “overbanked,” meaning that by
spreading your assets over a multitude of different accounts, you may be paying
more in fees than is necessary. Especially as you approach retirement, it may
be worth considering consolidating accounts for ease of cash management and
investment oversight. We can also conduct a fee analysis of your portfolio; if you’re
interested, please give us a call.

The banking industry is highly competitive, and as such, it changes fast
and offers new features all the time. One of the biggest challenges, however,
is protecting account data. More government and industry initiatives now
promote increased transparency as to how consumer data is gathered, shared and
used by third parties.3

The bigger banks, like JPMorgan
Chase, Bank of America and Wells Fargo, have the advantage of capital to
explore new technologies in an effort to offer more features. You may have
recently seen ads that let consumers place their own temporary hold on a credit
card, view recurring charges so they can cancel them more easily or access
their accounts through fingerprint scans. But most people still like to deposit
checks at a physical bank, rather than doing so digitally; a recent survey by
Fiserv found that 53% of customers who visit a branch do so to deposit a check.4

Mobile banking has found
acceptance among all generations, but millennials, unsurprisingly, have
embraced it the most. A 2018 study by Business Insider revealed 97% of
millennials use mobile banking, followed by 91% of Generation X and 79% of baby

Expect more innovations like this
as banks continue to evolve their services to attract and keep their
tech-friendly customers happy.

Content prepared by Kara Stefan

1 Knowledge@Wharton. Aug. 27, 2019. “How Fintech Can
Make Banking More Inclusive – and Empowering.” https://knowledge.wharton.upenn.edu/article/fintech-can-make-banking-inclusive-empowering-consumers/. Accessed Sept. 3, 2019.

2 Margarette Burnette. NerdWallet. Sept. 28, 2018. “How
to Cash a Check Without Huge Fees.” https://www.nerdwallet.com/blog/banking/cash-check-paying-high-fees/. Accessed Sept. 13, 2019.

3 Knowledge@Wharton. Jan. 16, 2019. “Why Open Banking
Represents a Seismic Shift for Fintech.” https://knowledge.wharton.upenn.edu/article/open-banking-represents-seismic-shift-fintech/. Accessed Sept. 3, 2019.

4 Andrew Meola. Business Insider. Aug. 8, 2019. “The
digital trends disrupting the banking industry in 2019.” https://www.businessinsider.com/banking-industry-trends. Accessed Sept. 3, 2019.

5 Ibid.

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