On Friday, Chase and Wells Fargo announced that their respective debit fee pilots would end, and today SunTrust and Regions Bank announced a change of fee policies with refunds for fees already charged customers. Over the past week, many of the other top banks in the country like U.S. Bank, PNC Bank and TD Bank made strong statements that they would not be implementing debit fees. And in an surprise move (after the initial posting of this blog), Bank of America rescinded their planned $5 debit fee based on 'consumer concern'.
Was this unprecedented big bank about-face caused by the significant public response initiated through blogs and social media?
Almost immediately upon the announcement of the $5 fee by Bank of America, a grassroots movement began on Facebook under the name of 'Bank Transfer Day'. President Obama and Richard Durbin blasted Bank of America for their decision and trade publications like the Credit Union Times immediately jumped on the Bank Transfer Day bandwagon, sharing local and regional initiatives while encouraging member organizations to extend November 5 Saturday hours.
CUNA and the state credit union leagues also joined the effort by quickly creating marketing and advertising support for the social media fed Bank Transfer Day, including model press releases, Q&As as well as management and staff talking points. Even independent organizations like the Consumers Union provided a 'How to Change Your Bank' video and a 'Move Your Money Checklist' on their www.defendyourdollars.org website.
In its own defense, Bank of America tried to blame the recent Durbin Amendment for it's new fee which was not well received by consumers and only added fire to an already growing discontent across social channels. "Bank of America's new debit card fee was the last straw for many consumers who are tired of banks that got bailed out and are now turning around and hiking fees," said Norma Garcia, director of Consumers Union's financial service program.
Despite all of these efforts and initial reports of increases in new accounts at several large credit unions immediately after the Bank of America announcement, the actual transfer of new accounts to small banks and credit unions may be less than spectacular. As Jeffry Pilcher from The Financial Brand wrote last week on his blog entitled, "4 Ways 'Bank Transfer Day' is Silly", this effort may not create any more new accounts than previous movements like the Huffington Post "Move Your Money" effort. As he and other industry pundits have mentioned, inertia is difficult to change, especially since transferring bank relationships is so difficult for the consumer.
But while social media efforts may not result in massive movements of funds, the impact did result in the movement of something much more significant . . . the previously stated policies of some of the largest banks in the country.
As mentioned by Jesse Torres on his Social Media and Banking blog last Sunday regarding Bank Transfer Day and related efforts, "Such an attempt 10 years ago would not have resulted in such an outcome. However, with social media's immediate and widespread impact, banks must now consider the the Social Media Effect when devising corporate strategies." He goes on to say that Bank of America and the other large banks that instituted a debit fee failed to realize the impact of potential public outrage.
The public responses associated with the debit fee reversal by SunTrust and Regions Bank today illustrate the dramatic impact that social channels can have in establishing (or changing) corporate pricing and policy. "We believe banking is a relationship business and recognize the importance of responding to client preferences," stated Brad Dinsmore, consumer banking and private wealth management executive at SunTrust. "We've listened to our customer's feedback and will provide the convenience and security of check cards at no additional charge as part of our checking accounts."
Similarly, John Owens from Regions Bank stated, "We have heard from our customers and are responding to their feedback by eliminating the monthly fee."
Do you feel the impact of negative consumer reaction that was amplified by social media efforts like Bank Transfer Day resulted in the reversal of debit fee decisions? Will this mark the end of banks moving en masse as they have done in the past with regard to fees and policy? Will future fees be less transparent?
I would love to hear from you.