If you’ve been itching to ditch your bank or upgrade your credit card, you have something to look forward to in the new year.
After several years spent catering to less risky, high net worth consumers, lenders and big banks will start to change their tune in 2014, says NerdWallet.com’s Anisha Sekar.
“After the financial crisis, banks significantly cut back on marketing to middle-income consumers and focused on high-income borrowers,” she says. “But you’ll see now they’re trying to attract less than super-prime customers with more accessible perks.”
Here are just a few ways banking will get a lot sweeter in 2014:
They're bringing the bank teller to you
Bank of America (BAC) raised eyebrows when it rolled out 150 teller-assisted ATM machines earlier this year, and we can expect to see more banks follow suit. The kiosks let customers speak with a live teller via webcam seven days a week, with longer service hours than a typical bank branch. Bank tellers themselves may have reason to fear this step away from traditional banking, but it's a win-win for consumers. Because bricks-and-mortar locations are so expensive to run, they're a big reason banks have had to boost their fees in recent years. Moving toward digital kiosks could be a way to compete with online-only banks, which are able to offer low-fee, 24/7 banking to customers without needing physical branches at all. They can then pass those savings on to consumers in the form of higher interest rates and lower fees.
Expect perks on perks on perks
Consumers, no matter the size of their checking accounts, can expect more “star” treatment from banks in 2014. Concierge services, typically reserved for those who carry ultra-elite cards, are starting to crop up on midrange cards as well, like the GM credit card, which charges no annual fee and offers free upgrades on some international flights. Issuers are getting more creative with perks, too. This year, American Express (AXP) rolled out free Amazon Prime memberships to new Blue Cash Preferred cardholders, and Barclays passed out free FICO scores like candy. Capital One and CitiBank (C) both ramped up sign-up bonuses, offering tens of thousands of free points, bonus miles, and in some cases, plain old cash to new customers.
Banks will take on the classroom
When the recession hit, major financial institutions were vilified for their lack of transparency, while smaller, local banks and credit unions gained esteem for their education outreach initiatives. In 2014, you can bet big banks will continue their uphill battle to redeem themselves by focusing on consumer education. Bank of America and PNC Bank (PNC) are at the forefront of that mission, launching online platforms of their own to help consumers better understand their finances — BetterMoneyHabits.com and KhanAcademy.com, respectively.
Bonus: Credit scores will get more consumer-friendly
Kiss your old credit score goodbye in 2014. Sekar says consumers can expect to see credit reporting agencies start to tweak their traditional scoring models, long overdue for an upgrade.
"The credit scoring system as it is leaves certain people — immigrants, people paying off loans, people who don't have a line of credit in their name — in the lurch," she says. Credit bureaus will take strides to even the odds next year, building on advances that went through this year, like the release of the new Vantage Score 3.0 by Experian. The scoring model is the first to give consumers with a history of bad debt a break by leaving settled debt collections accounts out of their score. And Transunion and Experian both started offering renters a way to factor their on-time rent payments into their score, which better suits America's shift toward renting and away from homeownership.
This is all good news for the little man, but will consumers bite?
Even with these moves, banks and other financial services are have a long way to go toward endearing themselves to disenchanted consumers. They're still the least trusted industries among consumers, ranking lower than the media, government and the auto industry, according to a 2013 Edelman/CFA Trust study.
And where the largest banks faltered in offering low-fee, easily accessible banking options for low- and middle-income consumers, a new crop of online-only, cheap checking options have elbowed their way onto the scene and into consumers’ wallets — and hearts.
“I think [big banks and lenders] see it as their time to reinvent their image as perhaps an industry that’s not trustworthy,” Sekar says. “[They’ll] show consumers that there’s another side to the story.”