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Survey shows most Americans don't have faith in banks

Feb 04, 2013 Sean Albert

A new nationwide survey makes one thing very clear - Americans don't trust banks.

The findings, overwhelmingly negative toward traditional banking services, are good news for alternative credit provided by short term lenders. Small businesses have sought alternative financing in recent years because they often have difficulty securing loans from their banks.

Conducted by Harris Interactive, the poll found that 64 percent of Americans don't fully trust banks, 87 percent don't believe their banks are transparent about how they conduct business and 68 percent don't think banks are on their side.

The respondents negative views stem from experiences they've had with bank fees. Among those surveyed, 30 percent said they have been hit with unexpected charges and 31 percent said they considered bank fees unfair.

The increasing use of electronic payments with prepaid ACH cards, debit and credit cards was emphasized by the move away from writing checks from traditional checking accounts. About 67 percent say they write fewer checks than in previous years. Within the age 18 to 34 group, 14 percent said they have never written a paper check.

Less innovation
The survey revealed that people believe that in the past decade, the banking industry has been one of the least innovative in the United States, along with airlines and pet care businesses. Only 11 percent believe their banks offered new services that they would use.

Of the respondents, 65 percent also said they would consider using an online banking service in place of a traditional brick-and-mortar bank. Within the younger group, 81 percent indicated they would forego traditional banking services.

GoBank, an online bank, commissioned the report, "State of the Bank," which detailed the Harris polling results. Respondents were 2,080 adults aged 18 and older who have active checking accounts. Most of those who participated said they have a household income of less than $100,000.

The online bank was announced recently by parent company Green Dot Corporation, which specializes in electronic payments through prepaid ACH cards and debit accounts. A network of 40,000, no-fee ATMs is also being set up for GoBank transactions.

The new bank is an outgrowth of the some of the trends currently occurring in banking and other financial services. Smartphone users, for instance, are increasingly using their phones to make purchases online and pay bills rather than write checks or stop at their local bank branches. Many consumers' views of high bank fees and required minimum balances reflect the ideas expressed in the State of the Bank report.