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Bank Transfer Day nets 650,000 new customers for credit unions

Has there ever been a time like we are now experiencing in the world of banking?  Banking consumers have been barraged by the media, consumer groups, and even Congress on how they are being mistreated and taken advantage of by their financial services firms.

Of all the messages I've seen and heard, the most astounding was Senator Dick Durbin getting up on the floor of the U.S. Senate, urging consumers to "Get the heck out of that bank", and "vote with your feet." 

How did we get to this point?

This can all be traced back to the financial crisis in 2008. Do you remember how bad it got?  At the time, I was working in a large financial services firm, and although I wasn't an "insider" with any privileged information, the worst case scenarios were indeed very scary.  It's hard to imagine it now, but I actually withdrew $500 cash to keep in my house just in case it all came apart (which I have since returned).
Washington then stepped in with TARP, and depending on who you ask, either saved the day, or did just the opposite.  And along with TARP came the massive "too big to fail" legislation of Dodd-Frank, and the Durbin Amendment, limiting swipe fees to 21 cents.  Banks reacted by adding monthly debit card fees, and voila, we now get "Bank Transfer Day."

The Credit Union National Association (CUNA) surveyed over 5,000 of its member firms, and estimates that over 650,000 new accounts have been opened, with $4.5 B in funds added.  Looks like Bank Transfer Day was a success.

So what's a bank to do?

First, give your customers the best user experience possible. Since your web site and mobile apps are how most customers will interact with you, make sure they are fast, reliable, and secure. 

Second, focus on your account opening process.  Speed and ease of use matter most here.

Also, protect your site, and your customers. DDoS has now gone mainstream and sites of all types are under contact attack.  Watch out for those combined attacks, such as a decoy DDoS attack combined with a SQL injection attack to get at your customers' data.  Akamai has tracked many examples of these types of attacks.

What's next?

More regulation seems inevitable.  Capitalization requirements will continue to be tweaked, forcing financial services firms to divest parts of their operations.  Consumer activism shows no signs of letting up, so PR attacks against banks will continue.  But this could all be dwarfed by the risky situation now underway in Europe.  Let's hope things don't come unraveled again - I don't want to have to withdraw $500 in cash again for an emergency fund.

Rich Bolstridge is Chief Strategist, Financial Services for Akamai