Viking Posted June 8, 2018 Share Posted June 8, 2018 Spekulatius had a great comment about competition and banks. His comment is copied below. How brand loyal are you to your financial institution. When is the last time you make a change? Bank account? Line of Credit? Credit Card? Mortgage? Investment Accounts/Advisor? What about thr risk of competition from online banks, since branches are less and less important. I don’t think I visit a bank branch more than once a year now. Online competition could crimp the margins over time, same than what is happening to retail. at least I think that most cost savings from digital transformation should be competed away. Also, the online banking makes it easier to bank with credit unions, which have fewer branches. This is what I am doing. Then we have the risk of much higher credit losses when interest rates rise. I see reports that junk bonds are shakier than ever, does the same negligence bleed into bank loans. I don’t think that banks have really moats. Maybe convenience is a moat, but once I have an app on my smartphone, how much more convenient can it get. Link to comment Share on other sites More sharing options...
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