“if we assume that the average American family has $3,800 in the bank, and we assume that only 300,000 of the 5.6 million people who moved had even that much, that’s more than a billion dollars divested from big banks. In the end, it won’t stop them from chugging along, but it proves that a concerted effort to change the status quo can be worth a lot, literally and figuratively.”

My take: There are a few statements here that might not stand up to scrutiny.

1.To say that the number of people that have switched account is 5.6 million and counting, suggests the “movement” is still active. It’s certainly true that people switch banks everyday, but there’s no evidence that the rate of switching is anywhere near the rate it was in the month leading up to BTD.

2. I’m having a little trouble with the claim that it was the Move Your Money campaign that worked. My understanding is that the MYM was started long before Q3 2011. Attributing the success of the late 2011 switches to this campaign seems disingenuous to me.

3. The comment that a billion dollars divested from big banks is “worth a lot, literally and figuratively” doesn’t hold water. As of the end of September 2011, the 5 largest U.S banks — or what the article despicably calls the “predatory” banks — had a little more than $3 trillion in deposits. A billion dollars is 0.03% of that. Let me put that in perspective for you: As a percentage of my annual salary, I spend more than 0.03% when I take my family out for dinner on a Saturday night.  Even if $10 billion came out of the top 5 banks, we’re still talking just one-third of one percent of the deposits they have.

Why is this important?

Because credit unions are deluding themselves, and missing the more important picture.

While they obsess over painting large banks as Doofenshmirtz Evil Incorporated, the $1 billion leaving the big banks pales in comparison to the $30-40 billion leaving the system.

In an Aite Group report that I’ll be publishing next week, I’ll define a segment of consumers I call the Debanked: Mainstream consumers who willingly opt out of the traditional banking system, taking their $30-40 billion with them to alternative financial services providers.

These people aren’t just leaving big banks, they’re leaving all banks and credit unions behind. And these are not disadvantaged, uneducated consumers. They’re highly educated, employed, make decent money, and they’re young.

I don’t have the data to prove it,but I’m betting many of the Debanked aren’t aware of credit unions and the alternative they provide.

CU professionals can go on patting themselves on their backs for a supposed “job well done” regarding Bank Transfer Day (even though most credit unions didn’t actually do anything), but it’s all quantipulation as far as I’m concerned.

Lots of interesting data points and trends in this report. Here’s what caught my eye:

1. PNC is kicking @ss. The bank’s satisfaction level jumped from 57% in Q1 2010 to 79% in Q1 2011. The 57% number was down from 70% in Q1 2009. My guess is that these changes reflect two things: 1) The drop in 2010 reflected PNC/Nat City merger fallout, and 2) The bump in 2011 reflected the great job PNC did with the merger and the bank’s success with its Virtual Wallet product. The 79% level is 9 percentage points higher than Chase or Wells Fargo, 16 points higher than Citi, and 17 points higher than BofA. Kudos to PNC.

2. PFM interest and use is anemic. This might reflect the blending of the demographic segments. In other words, it might be too late to get Boomers, and maybe Gen Xers, interested in PFM. Would love to see the numbers for Gen Yers. But the Comscore numbers are not reassuring for PFM vendors, nor for online channel execs at banks looking for ways to use the online channel to add value to the customer relationship. (Side note: I’ve got an Aite Group report on PFM coming out in late Feb/early March that will define strategies for addressing the issues banks and CUs are having with PFM). Just half of BofA and Wells Fargo customers are aware of those banks’ PFM tools. In contrast, 60% of PNC customers know about Virtual Wallet, and 63% of USAA members know about the Money Manager tool. Both BofA and WF have had their PFM offering a lot longer than PNC and USAA has had theirs.

3. Nobody knows about P2P payments. And of those that do, few use it. This is a cause for concern because a number of the core apps providers I’ve talked to recently are expecting P2P payments to be big, and become a revenue generator for both themselves and the banks that offer it. Personally, I think banks go about marketing P2P payments all wrong, and Comscore’s numbers give me some proof for my contention.

4. Social media efforts go unnoticed. I’m sure you’re tired of hearing me bash social media gurus and zealots regarding their baseless claims about the miracles of social media, but Comscore’s stats really tell a story. Less than one in five consumers are even aware that their FI has a presence in the social networking space.

5. Email is an effective communication channel. Email sure takes a beating in the blogo- and twitter-sphere. According to the Comscore report:

“…the impact of receiving emails to new account opening activity is on the rise. While the response rate on offers to open a new account is still modest at 6%, it represents a doubling of last year’s rate. In fact, email is highly effective in increasing customer awareness and engagement in other offerings, with 17% of recipients visiting the site to get information on other products.”

6. Remote deposit capture awareness is low. Just 29% of smartphone owners are aware of  the ability deposit checks remotely (I know of an 8 year-old who knows about this feature). This surprised me considering the importance so many bankers place on RDC as a way to differentiate their organization, and attract younger consumers.

Overall, lots of good stuff in this report. Nice work, Comscore.

“In spite of all the regulation that helps prop up legacy business models and protect established companies, much of banking is ripe for digital disintermediation-and it’s starting to happen already. Fundamentally, banks connect those with money to those who need it. By limiting access to the systems that handle the transactions, banks have been able to charge big fees. But the walls are breaking down now, just like they did in the music business.”

My take: The banking and music industries aren’t analogous.

In response to the article, @dmgerbino tweeted “I disagree. Banks/CUs are embracing change. The music industry tried to stop it.”

David’s right, but there are a number of other reasons why the viewpoints in the article are off-base, and why the music industry suffered what it did:

1. The product form changed… Although the music industry saw plenty of change in product form from 1950 to 2000 (from vinyl to cassettes to CDs), one thing was constant: The product was a physical product. It wasn’t until music became a predominantly virtual product that the industry began to suffer.

2. …which caused the cost of production to plunge…. In and of itself, the digitization of music doesn’t explain that industry’s woes. Another contributor is that, as a result of this digitization, the cost of producing the product dropped. Virtually any musician could produce a high-quality mp3 file.

3. …and caused the cost  of distribution the plummet… In addition to making it easy to produce the product, musicians could easily do an end-run around the traditional distribution channels and go direct to their fans.

4….which exacerbated intellectual property rights….The fly in the ointment — illegal file sharing — became more like a mothra in the ointment thanks to Napster and subsequently other sites. This created a need for new approaches and new firms with the capability of protecting and enforcing these rights.

5….and resulted in new business models. iTunes and other companies emerged to fill the need. Today, people subscribe to music online. And it’s even getting worse for traditional players in the industry. Recently, I watched Bob Weir’s band Ratdog broadcast a live concert from his new TRI Studios in Marin County. It was free, and attracted about 100,000 viewers. They could have easily charged $5 and with even just 20,000 views grossed $100,000. The variable costs of touring from city to city can be avoided.

Now let’s look at the banking industry:

1. The product form hasn’t changed. I find it interesting that the author of the article says that banks “fundamentally connect those with money to those who need it.” That’s one part of the business. But payments — think of this as the “transfer of funds” — make up a pretty big portion of what a bank does, no?  When you write a check, or use your debit card against your bank account, you are fundamentally triggering a transfer of funds from your account to someone else’s. It’s certainly true that access mechanisms — how we check our balances, transfer funds between our own accounts, etc. — has changed, and become more electronic.  But the underlying form of the product has been electronic for some time now.

2. The need for security drives up costs. As far as I know, no one has tried to steal the music off my hard drive (it’s mostly Grateful Dead music, which is widely available on the Internet, anyway). But protecting the funds in my account is a pretty big deal. And as most banks know, it requires a lot of investment to ensure that accounts are protected from fraudulent activity. So-called disintermediators to the banking industry often seriously underestimate the cost of doing this.

3. Risk management is a requirement. Security and fraud are one thing, risk management is another. When a bank makes a payment it often assumes the risk of non-payment (something Dick Durbin can’t seem to understand). Any potential newcomer can design a fancy front-end website to disintermediate the banks. But that doesn’t alleviate the need for risk management.

4. Regulations create barriers to entry. While the bank haters love to point to regulations as something that keeps the barriers to entry erected, most bankers know that there are scores of regulations that drive up costs and eat into profitability (FYI: I’ve estimated — with the help of Continuity Control — that the largest 100 banks in the US spend $1 billion on compliance each year). Potential disintermediators looking to get into the industry must adapt to the regulatory environment.

————–

All of this is not to say that we won’t see new entrants into the industry. But what we’re not seeing — at least not right now — is the disintermediation of banks. New entrants are not creating radically new business models that are threatening the legacy players.

In fact, one of the author’s examples shows how banks’ role is strengthened, not disintermediated: Square. Today, many micro-merchants are forced to accept cash or checks from their customers because they haven’t been able to accept credit cards. By outfitting these merchants with card readers, more payments can actually flow through the banks that issue credit cards.

Another of the author’s examples — Simple — does create a new interface to banks, but doesn’t eliminate banks from the financial services equation.

Bottom line: There’s no doubt that the financial services will dramatically change in the next 10 years. But because of the complexity of moving money — including technological complexity, security concerns, risk management needs, and regulatory compliance — banks aren’t going to be disintermediated a la the music industry. The fat lady may be singing to the big music companies, but she ain’t singing to the banks. 

A condition in which the sufferer expects easy answers and solutions to difficult problems.

This condition has been prevalent in financial services for a long time. When I first started working with the industry full-time, the silver bullet was online banking. Subsequently, online bill pay, eBills, and PFM each took its turn as the silver bullet. All were touted as the panacea for poor customer relationships.

I couldn’t help but think that social media was taking its turn on that list.

But a new report from financial services communications firm Cicero, as well as my own research on financial advisors is making me reconsider whether or not social media is the new silver bullet among financial services executives. Instead, I’m coming to believe it’s being hyped more by the providers to the industry than among industry professionals themselves.

The Cicero report starts out with this claim:

“Social media offers the financial services sector an opportunity to resuscitate its relationship with the public after the financial crisis.”

My first reaction was: Oh really? Prove it!

But reading on, I realized that maybe I wasn’t alone in this sentiment. A number of data points from the study (which, by the way, I’m not knocking — it appears to be a perfectly legitimate piece of research) caught my attention. Here are a few — as they were presented — and my take on them:

“25% of respondents felt that social media offers a new way to communicate to tomorrow’s consumers.” This means, of course, that the vast majority of respondents — 75% — don’t feel that SM offers a new way to communicate to tomorrow’s consumers. In highlighting this finding, is the communications firm implying that these 75% somehow “don’t get it” when it comes to SM? Maybe the 75% have tried SM and have found that it doesn’t offer a new way to communicate.

“30% of those surveyed see social media as the future of communications.” Again, an interesting choice of which number to highlight, since this finding implies that  the majority — 70% — don’t see SM as the future of communications. After the study highlights the fact that Facebook reached 50 million users in less than four years, it goes on to show that just 22% of survey respondents believe that “consumers respond to social media.” Are the respondents clueless or do they know this from experience?

“One quarter of respondents are daunted by the volume of traffic on social media and how to monitor and manage it.” By now, you should be getting pretty good about doing the math, and have already figured out that 75% — or what we could call the “vast majority” — don’t find SM volume daunting, or find the monitoring and managing of it to be daunting.

———-

The question, or issue, here is this: Are financial services executives somehow missing the boat on something that social media proponents are seeing and advocating for?

———-

If you read the mainstream media, it might be easy to come to the conclusion that financial services executives are evil morons, clueless about how to develop customer relationships. Given the decline in the traditional mainstream media, this is the pot calling the kettle black.

There is a popular sentiment that the financial services industry is a “laggard” when it comes to social media, or is “struggling” with it (h/t to the Financial Brand for pointing this out a number of times to me).

But the evidence doesn’t support that. What the evidence supports is that financial services firms are doing plenty of things with social media — and that they aren’t seeing huge, transformational results.

This conclusion isn’t based on just the viewpoints of bankers.

I recently published an Aite Group report based on a survey of more than 400 financial advisors. We surveyed advisors about their use of technology in 2009 (including social media) and surveyed them again this year. I titled the report Financial Advisors’ Use of Social Media 2011: The Bloom Is Off the Rose.

There are three findings from the survey that stick out, one of which is not surprising: The percentage of advisors that use social media to support their practices has increased since 2009.

More surprising, however are these findings: The percentage of advisors that have reaped benefits from social media has declined since 2009, as has the percentage that say that social media is a strong contributor to a range of key business objectives.

One of the key messages I tried to get across to wealth management firms who are looking to help the advisors they support use social media was this:

Social media does not make you a good marketer. Good marketers figure out to effectively use social media.

Predictably, there were a number of negative responses to my report, primarily from vendors with a vested interest in providing technology related to social media.

Bottom line: While financial services executives have shown signs of silverbulletitis in the past, there is growing evidence that many are not drinking the kool-aid this time around, as it concerns social media. Social media proponents need to prove claims that SM can have a dramatic impact on customer relationships with theories and explanations for why social media is superior to communicating through firms’ web sites, call centers, and branches.

According to the authors, to get retweeted, a brand should:

• Not ask questions, or use hashtags. Apparently, “Who’s tried dipping french fries in a Frosty? #yum” doesn’t get retweeted. The author do concede, however, that “the use of questions to provoke a response may create a sense of engagement and cause direct communication between the brand and individual followers.”
• Use attention words. WOW, LOOK!, and TODAY ONLY! can boost your retweetability by up to 40% according to the authors’ research.
• Not tweet (or do tweet) about contests. On one hand, the authors say that “promotional messages announcing contests did not increase retweetability.” However, later on in the article, they claim that asking to be retweeted is a good tactic, and they use the following example tweet from eBay: RT for a chance to win a $100 eBay Gift Card! On Mother’s Day diamonds can be mom’s best friend. #eBayMomHeroes
• Humanize your brand. The authors believe that “companies can make their brand appear to be a ‘living thing’ and signal that there is more to the brand than just making and selling products or services.
• Make it practical and relevant. In the authors’ words, “in the hypertransient environment of social media, it is imperative to associate brand messages with what is top in followers’ minds.”

My take: The MIT Sloan Management Journal should be ashamed to publish this kind of stuff. It might pass as publishable at a cheap marketing daily trade publication, but not at a legitimate journal like SMJ.

Why? Because it’s so “in-the-weeds” tactical that it ignores the bigger, and (arguably) more important issues regarding the use of Twitter from a brand perspective:

1. How important is getting retweeted in the scheme of things? Gurus keep hailing Twitter (and other forms of social media) as a way to better engage customers and prospects. And I buy into that.

But if your goal for using Twitter is getting retweeted, then aren’t you really admitting that all you’re trying to do is use the tool for broadcasting purposes? And…if your goal is to broadcast a certain message, then any marketer worth his or her salt will evaluate a range of channels to determine which is most effective (reach/cost) in order to decide how to broadcast that message. And…if a marketer actually does that, what are the odds that they will find that there are other channels better suited for effective broadcast than Twitter? Answer: Very high odds.

If, however, the purpose of using Twitter is to engage customers and prospects, then retweeting simply isn’t that big of an objective. Too bad the authors’ research didn’t look at how to improve engagement.

2. How does the composition of a brand’s followers impact retweetability — and overall Twitter strategy? OK, forget the whole engagement thing for a moment, and assume that retweetability is the brand’s primary Twitter objective. Different brands have different types of followers — types, as in demographic, attitudinal, and behavioral differences. Isn’t it conceivable that this composition will impact the likelihood that someone will RT? I’ve seen plenty of research that shows that younger consumers are more likely than older ones to refer products to their family and friends. Wouldn’t you think that that behavior extends to retweeting? So, a brand with a primarily younger follower group is probably to get their tweets retweeted — A PRIORI — than a brand with an older follower demographic.

And then, beyond retweeting, shouldn’t the composition of the follower group dictate overall Twitter strategy? Maybe your brand’s followers are predominantly younger consumers looking to participate in the brand community. Then retweeting may very well be an important Twitter objective for that brand. But that’s not necessarily the case.

3. What does humanizing the brand mean? It never ceases to amaze me how some marketing people can throw around the term “humanizing” as if it’s some universally understood and accepted term. The authors say that “[humanizing] content can be in the form of humor, a historical view of the brand or even an inspirational message such as a quote.” Oh really?

Is your brand humanized? Yes? Prove it. Not sure? Of course you’re not sure, because how would you know. Advertisers have used humor in ads for decades. Simply using humor doesn’t qualify as humanizing. Why doesn’t showing pain and suffering (e.g., starving children in Africa) qualify as “humanizing”?

Yet, the authors of the article don’t hesitate to tell marketers that they should use Twitter to “humanize” their brand, and even worse, do so in order to increase retweetability.

Bottom line: Resorting to tactics to get your tweets retweeted may cause you to overlook the more important questions about how to use Twitter.

“Tooth Fairy forgot to visit. ‘I bet she remote deposited the money,’ says our eight-year-old. Extra quarters tonight for the #smartkid.”

If you know Tammy, then you’re not surprised in the least that her kid would be bright enough to know what remote deposit capture is at eight years old.

But (sorry Tammy) that’s not the point of this post. The purpose is to point out a potential opportunity for banks and credit unions.

When I was an eight year-old, the tooth fairy came when I lost a tooth, and left a quarter under my pillow. Do you mean to tell me that, in the intervening hundred years, this tradition hasn’t changed?

I don’t know exactly at what age kids today start texting and emailing, but I am willing to bet that the first thing my two older daughters do upon waking up each morning is to check their smartphones to see who texted them overnight, and to check their friends’ Facebook status.

My younger daughter (getting close to the end of her tooth-losing years) doesn’t have a smartphone, so when she gets up she immediately turns on her iPod touch to play games, and — much to the chagrin of her mother and I — to text with her friends who have figured out how to use the device for that purpose.

My point: At a very young age, today’s kids are tied to their technology.

But you knew that already.

Despite knowing that, however, it appears that few financial institutions have figured out how to do anything about it.

Enter the Tooth Fairy Opportunity.

Why don’t banks and credit unions give their customers (members) the ability to transfer money into their tooth-losing kid’s account with a “tooth fairy” option — an option that would trigger a text or email message from “the Tooth Fairy” to the child letting them know the Tooth Fairy “gave” them money, and a message that the parents could personalize about how the kid should use the money wisely (i.e., not on candy) or to save the money, etc.?

Is eight years old too soon to teach a kid about smart money management? Tammy’s kid might be a little ahead of the game, but even 10- and 11-year-olds are still losing their teeth, and they’re definitely not too young.

The Tooth Fairy opportunity is a low-cost way to engage customers — and their children. 

As American football is gripped by Tebowmania, a new “Tebow” will become prevalent in the world of financial services:

Total Benefits of Ownership (TBO)

TBO will be adopted by many banks and credit unions as a new approach to marketing bank accounts in 2012 and beyond.

Banks’ and credit unions’ approach to marketing checking accounts has evolved over the past 10 to 15 years. FIs have evolved (if you want to call it that) from:

1. Rational marketing (“We have higher rates/lower fees!”) to…
2. Emotional marketing (“We help you achieve your dreams!”) to…
3. Hysterical marketing (“Move your money away from the evil big banks!”).

2012 will bring a return to a more rational (i.e., quantitative) approach to marketing: Competing on the total benefits of account ownership.

The formula for TBO is simple:

TBO = Interest earned + Rewards redeemed – Fees paid

FIs’ and consumers’ current ability to calculate TBO is practically impossible, however.

Until recently so-called free checking accounts promised no fees, but through overdraft fees, foreign ATM fees, stop payment fees, wire transfer fees (need I go on?), consumers paid out plenty for their checking accounts — but could barely forecast those fees in advance.

If interest was earned in checking accounts, or affiliated savings accounts, few consumers could tell you how much interest they earned in a given year, nor forecast that amount looking ahead.

And if you think debit rewards are dead, tell that to UnionBank who’s giving 5% back on debit card spending to new account applicants.

Looking ahead, merchant-funded incentives will become more prevalent. I admit that calling an offer for a discount a “reward” is a bit of a stretch. But if you earn a discount based on your spending, the amount saved should be attributed to the benefits of account ownership.

As FIs continue to re-price their checking account offerings to motivate consumers to hold more accounts or higher balances, demonstrating the total benefits of ownership will become the way banks and credit unions will attempt to differentiate themselves.

As consumer activism continues to rise, the way for financial institutions to respond is by demonstrating the value they provide — by quantifying it, and compete on the basis of it.

Executing on this won’t be easy, however. FIs will need technology offerings that deliver the essence of TBO:

Enabling prospects to model their behavior to forecast expected TBO, and enabling existing customers to calculate actual TBO on a real-time basis.

FIs will need the ability to aggregate accounts (internally), compile customer activity across channels and products, and track rewards and merchant-funded offers.

Sound too complicated? Think it’s too much effort for consumers? You’re underestimating the increased desire among consumers to make smarter decisions about their financial lives, their desire for more transparency, and the ability of technology — particularly mobile technology — to make this a reality.

You’ll have to read the report to see which technology firms we think will be the leaders in the development of these capabilities, how TBOmania will play out, and the other trends Aite Group is anticipating.

“Ron, I’ve been working in credit unions for more than 30 years. I know hundreds of C-level officials, and I disagree that there is a “meaningful number of young professionals involved with managing, leading, and running credit unions…..” There is indeed a cadre of outspoken young people on the blogosphere and around the watercooler, but from what I’ve observed, they are more junior level people from credit union marketing and training departments, and the numerous marketing agencies that want to sell them stuff. They are indeed a rah rah bunch, but they aren’t leading their organizations now, nor will they be leading them in the future. The path to the corner offices doesn’t go through the marketing departments of credit unions. Never has and never will.

I should add……..thankfully for us.”

What do you think? Is Hap right?

My take: The question of whether or not the future leaders of CUs will come from marketing can’t be answered without understanding why the past leaders haven’t come from marketing. Two reasons dominate:

1. Worn-rug syndrome. Is there a rug in your house or office that has a path worn-into it? And what do people do when there’s a path already worn-into the rug? They walk on it.  So when the path to the CEO position has always been filled with people from a particular part of the organization, not only does the incumbent CEO think the position should be filled by someone from that path, but so does the board. And what happens is that marketing isn’t considered a source for the job.

2. Poor reputation. Let’s face it. Marketing has a poor reputation in the eyes of many senior CU executives. This negative becomes ingrained and even a great potential future leader will suffer to overcome this if s/he is in marketing.

So, is Hap right? That it will “never” change?

No. 

But that’s not to say that marketers in credit unions will somehow magically be on the CEO track in the future. The ones who get on that track will have to redefine the role of marketing in their organizations. 

Needless to say, the tchotchke-marketers (those whose view of marketing is centered around giving out refrigerator magnets) won’t be on the leadership track.

But marketers who view the marketing function too narrowly — typically in advertising terms — won’t make the track either.

The marketers who infuse marketing into members’ channel experiences, and who influence overall corporate strategy will be the marketers who make it on the leadership track.

Sorry for the political incorrectness, but a lot of older CMOs won’t get there. Their narrow view of marketing is too ingrained. The younger marketers are starting from a different mindset of what marketing is, and what it could be.

I hope you’re still around credit unions for the next 30 years, Hap, for these young CU leaders to prove you wrong. 

For more on this topic, see this post on The Mojo Company blog.

Snooze. 

Banks and credit unions are missing a huge opportunity here. Namely, to transform those legacy physical structures into financial “spas.”

You know, the place where you go to get into “financial shape”. Kinda gives new meaning to the term “loan workout”, no?

Seriously though (OK, not too seriously), instead of trying to get people to hang out and drink coffee, if banks transformed their branches into spas, while women were getting their mani/pedis, they could be having meaningful conversations with financial reps about their financial lives. 

Open an account (or maintain a certain balance, number of accounts, etc., you get the picture), get the manicure for free. 

Think I’m being sexist? Screw that, everybody knows it’s women making the financial decisions in an incredibly high percentage of households.  It’s certainly no more sexist than slapping some pink colors on something and calling it “marketing to women” (and you know that there are banks and other types of companies that do that).

You don’t think this idea will fly, do you? That’s OK. Because cafes and high-tech, self-service gizmos aren’t the “branches of the future” either. 

Among the nation’s largest stand-alone direct banks, deposits have increased by 70% since the first quarter of 2008 to a combined $330 billion as of Sept. 30, or roughly four times the industrywide pace. Even for ING Direct, the largest and most established Internet deposit business, deposit growth of 27% since the first quarter of 2008 to $82 billion at Sept. 30 was far ahead of industrywide growth of 17% to about $10 trillion.

My take: The online banks may have grown far faster than other FIs (70% vs. 17%), but given the smaller base of deposits, that’s not very hard to do. In fact, if AB wanted to further sweeten the online banks’ story, it could have mentioned that their market share of deposits grew from 2.3% in 2008 to 3.3% in 2011 — a 43% jump in market share.

Ah, but now I’m the one quantipulating.

There is another side to this story, however.

Based on the numbers presented by the article, the online banks captured just 9% of the industry’s total deposit growth from 2008 to 2011. Meanwhile the top 5 banks (JPMC, C, BofA, WF, USBank) captured 40% of the deposit growth (my estimate is based on adding Wachovia into the WF numbers, and Wamu into the JPMC total).

While AB points out that the online banks’ growth rate is four times greater than the industry pace, it fails to mention that the top 5 banks’ deposit growth ($, not %) is four times greater than the online banks’ increase. In addition, as the online banks’ share of the total market grew from 2.3% to 3.3%, the top 5 banks’ share remained constant at 41%.

What it means: 1) Despite the “safety scare” of 2008-2009, and the “move your money” and other negative sentiment toward large banks in 2011, the top 5 banks are weathering the industry’s storm, at least from a deposits perspective; and 2) The online banks’ gains would appear to come at the expense of credit unions and community banks.

Oh, and the other thing it means is that, if you’re going to quantipulate, remember that there’s probably another side to the story.