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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 boomers.5

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


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.

Content prepared by Kara Stefan Communications
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Chad Centorbi

Chad Centorbi founded Centorbi Financial Group Inc. in 2004 to serve pre- and current retirees throughout Missouri and Illinois in various aspects of their financial lives. He is dedicated to always doing what is in the best interests of his clients and aiding them to the best of his abilities.