Well, more bad news for the banking industry. The market leader has made a move. Now watch everybody follow.
The news that Bank of America will limit overdraft fees for debit cards is mildly bad but predictable news for the rest of the industry. Not because BofA will be the only one to do this. Nope, because only Bank of America will be known for it while the rest of the industry sits stroking its chin over what to do next.
And they’ll execute only one strategy: Copy the market leader.
It astounds me that so many banks have been so unimaginative in the wake of their troubles. BofA’s news is by no means a game-changer. It’s a tiny thing really, but you can bet the competition will follow suit in order to keep up even if they have discussed doing this themselves months ago.
The question: Why didn’t someone else, someone hungrier and not the market leader do this first? Instead of that, the other banks will now be forced to do what they have no doubt considered and so they will follow the market leader until it thinks of something else. Again.
We have been doing a lot of work with financial companies recently, and it continues to amaze us how many of them are unwilling to make changes, no matter how small. They wait until the market leader does it. They have been enacting this “strategy” for years.
But that strategy does not help them one iota.
That’s because copying the market leader only helps the market leader. Not charging overdraft fees on debit cards, for example, will become a table stake, what you need to play in the game. Market leaders are the ones who are given credit for table stakes.
Additionally, Bank of America’s competitors just lost an opportunity to steal share from the largest pool of customers in the industry. The competitors will be forced to make a change and get nothing for it. No BofA customers will switch for something they already have.
Another opportunity lost. Sounds like the banking industry.