The number of banks offering investment services has declined almost every year for the past several years. But the banking industry has been consolidating even faster. As a result, the share of banks offering investment services has increased substantially.
According to FDIC Call Report data, 1,656 US retail banks report investment fee income, down 29% since 2007. Nonetheless, the share of retail banks selling investments has crept up from 24% to almost 28% over the same period, because consolidation of the banking industry has shrunk the number of US banks from 9,630 in 2007 to less than 6,000 today.
Trends in US Banks Selling Investments
This is good news for bank customers, more of whom have access to investment advice through their bank than ever before. Kehrer Bielan's consumer research has shown that bank client households would prefer to invest where they bank rather than with competing brokerage, insurance or mutual fund firms, but many are unaware that their bank offers investment services.
As the opportunity in investment services grows, how can banks position themselves to fully exploit it? Stay tuned for future Highlighters that will explore that question and others.