Sizing up a megabank

What in life isn't mega-sized these days? Everything from megastores to mega-churches to mega-cruise-ships tells us that our world is super-sized. We buy mega-sized rolls of paper towels to clean up the mega-sized soft drink we just spilled (which made a mega mess). Even our lottery jackpots are worth Mega Millions^®.

Sometimes we choose mega purchases because buying in bulk implies a lower cost, which is often true, but only a factor when we are trying to save money. If that were always true, you wouldn't choose the super-soft tissue with the soothing lotion when you have a super-sized cold — you’d settle for the thin, rough stuff that leaves your nose scratchy and sore.

Anytime we consider shopping at a big-box store (online or in person), we choose super-sized options because of the perceived benefits, such as convenience and pricing. Likewise, when people choose a megabank as the place where they prefer to hand over their money for safekeeping, the perceived benefits often align similarly. But do megabanks always meet those expectations? A ginormous financial institution that employs enough people to fill a small city may have a mega number of accounts, but how do they measure up when you need them to focus on just one customer in particular: you?

How big is a megabank?

How big is a mega-sized coffee? If you're a Starbucks regular, you'll know that "tall" is one of the smaller cups. If you're not a coffee person (or an Italian speaker), you might not know where "venti" fits in the range of sizes. While you can measure a cup by how many ounces it holds, when it comes to identifying by size, what is a megabank?

A financial institution can be clumped into three sizes, too: small, medium, and large. In terms of dollars and cents, the easiest way to identify a megabank is to look at its total assets. The four largest banks in America — the megas of the megabanking world — all manage trillions of dollars in assets: JPMorgan Chase^®, Bank of America^®, Wells Fargo^® Bank, and Citibank^®. If one of these is your primary financial institution, you are definitely not alone. Just one of these megabanks has more than 70 million customers, making each individual account holder far less than one-in-a-million.

A small community bank or credit union often manages up to $1 billion in assets, and mid-sized banks can manage up to $25 billion. Megabanks are those that support more than $25 billion in assets. In addition to the “big four” mentioned above, megabanks also include some other big names, such as Capital One^®, Fifth Third Bank^®, and Ally Bank^®.

The draw of a megabank

If you ask anyone with an account at a mega bank why they choose the big bank, one of the most common answers is super-easy, on-the-go technology. The early years of this decade have shown us that online banking and an easy-to-use mobile app are imperative for customers, and this trend is not exclusive to large banks. Good luck finding a community bank or credit union without a mobile app. Learning a new app shouldn't be the deal-breaker between a mega bank and a local bank. Convenience is a benefit we can all enjoy.

Pricing perks also tempt us. A megabank wants your business and offers a quick reward in an attempt to entice new customers to be drawn to the large side. The bigger the bank, the deeper its pockets. While the opening fanfare may sound appealing, a large bank often relies on a wide range of ways to earn its wealth, most of which don’t benefit you or your community. Like a mobile app, rewards can be found at a small bank, too, without so many strings attached.

When we dine at a restaurant while vacationing simply because we recognize the nation-wide name, we are relying on a familiar sign in an unfamiliar place. Same with a megabank: It’s handy to have branches and ATMs a-plenty, but when you can’t find one nearby, you can expect a hefty fee (from your mega bank and the random ATM you settled for) to cha-ching your wallet. If you aren't getting those ATM withdrawal fees refunded to you each month, you ought to rethink your reward system. (BTW, those fees are also helping pay for that name-brand, celebrity pitchman, too.)

Help is just an automated-response system away

You're at the mega mall for a mega-dose of retail therapy and then it's time to hike your way back to your car. If it's raining, how long are you willing to wait for the downpour to let up? Now imagine you need a helping hand from your megabank — maybe a question about the status of your loan application, or you've locked yourself out of your online banking access. How long are you willing to wait to get help?

If your mega bank is experiencing unusually high call volume — again — could it be because there are 70 million other customers who gave up on the FAQ page and the chatbot and who also decided to call for help? There's nothing like trying to get in touch with customer service and finding that you're just a customer desperately seeking, but not receiving, service. Now try calling your local credit union or community bank and see how long it takes to get connected to an honest-to-goodness person. (Bigger isn’t always... well, you know what they say.)

Sustainable banking where you live

Not everyone visits a bank branch, or even uses an ATM, but a community bank or local credit union may also deliver one big service that a big bank won't ever offer, no matter how many promotional gimmicks, or tech-y gadgets, or catchy brand spokespeople it hires: aligning with your values.

Megabanks cater to wealth and those who have it. When you make decisions about your life and your values, when you prioritize the neighborhood where you live, the community where you work, and the life you are building for yourself and your family, it all begins with supporting the place you call home. Deciding if you want your money to fund far-away corporations or sustain your local community isn't about super-sizing your life. It’s about building up what’s most important to you.

When making choices about where to bank, and who you trust with your money, you deserve the financial institution that believes you and your community really do deserve the super-soft tissue with the lotion. If you value community, you should choose a bank with a micro focus on the local issues that matter most to you, not a megabank focused solely on quantity.

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