Site taking aim at big banks gains attention
Executive at Needham lender names names and promotes local institutions
Big banks are coming in for another public relations beating.
A provocative new website that bills itself as “big banks’ worst nightmare” is garnering attention within the financial industry by bashing large institutions such as Bank of America and RBS Citizens Bank.
But the creator of the website — www.switchtocommunity.com — is not an Occupy Wall Street protestor or angry customer. He is another banker.
In a very unbank-like move, the website was created by a vice president at Needham Bank, Eric Morse, as a platform to promote the virtues of small, community-based banks with the slogan, “buying local means banking local.” But it also revels in the troubles visiting large institutions around the country, titling one section of its home page “big banks fail” and listing news stories collected from other sites about job cuts, uncertainty, and greater government scrutiny of larger financial institutions.
Needham Bank is a member of the site and Morse, who started the initiative with his own money, said he is working to get 11 other banks to join the site, including six in Massachusetts.
“Our number one mission is to extol the virtues of community banking,” said Morse, who has worked for larger financial institutions.
Bank of America, the nation’s second-largest bank, declined to comment about the site, as did Citizens, which is headquartered in Providence.
The big-bank bashing is not a new strategy. Mid-sized TD Bank, for example, is airing commercials illustrating how it is different from large, antiseptic and anonymous banks.
Suzanne Moot, a Milton-based banking consultant, said the community bank website strategy is unusual in that it names banks.
“It’s unbankerly,” Moot said. “Banks don’t usually throw darts at each other. They don’t speak ill of each other outside of their own circles.”
Some of the biggest banks in Massachusetts, including Bank of America, Citizens, and Santander Bank, are juggling legal and financial issues or trying to remake their image, providing an opening that community banks can exploit, Moot said.
But poaching their customers has proven to be almost impossible, she said.
Bank of America, despite headlines about its problematic foreclosure practices and fees, saw its customer deposits grow 1.5 percent between 2012 and 2013. Needham Bank, meanwhile, had its deposits drop almost 3 percent during the same period.
Customers might be dissatisfied with their bank, but those institutions are so entwined in their daily lives that switching is a hassle, Moot said.
Customers would not only have to move their money, but change their direct deposit, get new checks, and change all their automated payments from their electricity bills to their gym membership fees, Moot said.
The large institutions still have a convenience advantage, she said.
“I don’t see much evidence that people are moving in droves,” Moot said.