I thought I knew about bank competition until yesterday.
I've been a Bank of America customer for as long as I can remember. Yesterday I went to a branch to deposit a check. They gave me an offer for a new savings account that had a much better rate, and they effectively forced me to open it. But I was happy to. It was clearly a better offer, a better product, than I had.
When I was walking back to the office, I walked by an ad for a bank that was offering a savings account that was twice the rate Bank of America had just offered me. That got me thinking, and I realized before that visit to the branch, I had no idea what the interest rate was on my savings account.
So as soon as I got back to my computer, I did some Googling, and I found that with Capital One I could open an account in five minutes with an interest rate that was three times greater than what Bank of America was offering me.
So I ended up opening the account. It's surprising to me that two big brand name banks like Bank of America and Capital One actually don't compete against each other in the way that I thought. I thought there would be market parity. I thought there would be a much closer gap between interest rates that the two banks offered. Yet that's not the case.
So what I learned is that the onus is on us as consumers to seek out the information to figure out which products are actually better and worse for each one of us. On top of that, I just find it ironic that with Bank of America's offer to me to open the new account had it not been for that, I never would have cared about the interest rate on my savings account. Yet that account upgrade ended up leading to churning me as a customer.