Consumer Banking Verticals
There are a number of verticals within the consumer banking space. These verticals range from offering standard checking and savings accounts, to long-term savings products, and multiple lending options including various loans and credit cards. Both traditional banks and credit unions appear to offer these verticals across the industry.
List of Verticals in Consumer Banking
- Standard banking (checking and savings accounts)
- Offering high end savings products (such as money market, certificate of deposit, traditional and Roth IRAs, and other long-term savings products)
- Mortgage lending
- Home equity lines of credit
- Vehicle purchase lending
- Equity lending
- Student loan lending
- Personal loan lending
- Offering investment opportunities (stocks, bonds, other investments)
- Credit card lending
- Offering debit cards
- Mortgage lending includes helping customers make informed decisions about qualifications required to receive a mortgage. Banks help customers through the entire mortgage process, including: providing basic mortgage information, financial planning, submitting documentation, approving the loan, finalizing the loan, and servicing the loan payments. Mortgage lending can also include refinancing the loan at a later date.
- Mortgage loans are offered by banks such as U.S. Bank, USAA, Chase, Bank of America, and Credit Union One.
Credit Card Lending
- Banks that offer credit cards provide customers with a credit limit based on various customer criteria (such as income and credit score), and often offer rewards programs in the form of cash back, travel miles, or gift cards. Banks may charge an annual fee, as well as an annual percentage rate of interest on purchases. Some banks allow credit cards to be used to transfer balances from other cards, and make cash advances, all requiring different fees and APRs. Banks manage the monthly payments and interest accrual on their customers' credit cards.
- Banks offering credit cards include banks such as Fifth Third Bank, USAA, Bank of America, and PenFed Credit Union.
- Standard banking options include offering checking and savings accounts. Some banks offer these separately, while others combine them to offer more value to customers.
- Depending on the bank, there may be fees associated with standard banking services, which can be waived if specific criteria are met, such as with Chase or Citi.
- Credit Unions, such as Community Financial Credit Union, often offer basic checking and savings accounts for free with no special criteria necessary to waive fees.
Offering High End Savings Products
- Money market accounts allow customers to deposit large initial sums of money with banks and generate high annual percentage yields. Banks will allow access to money within certain restrictions, such as the number of withdrawals. Money market accounts are offered by banks such as Community Financial Credit Union, TIAA Bank, and Chase.
- Certificate of deposits (CDs) are long-term savings accounts, in which a customer invests money for a specified time, and pays interest for the duration of the investment. At the end of the specified time period, the customer receives all the money plus the interest. Banks generally require a fee for money to be taken out before the end of the agreed on terms. CDs are offered by banks such as Bank of America, Merrick Bank, and CIT Bank.
- Traditional or Roth IRAs are offered by banks as long-term retirement savings options, which have tax advantages. Customers regularly put money into the IRAs with the bank, and the money is then invested in stocks, exchange-traded funds, or mutual funds. IRAs are offered by banks such as USAA, Bank of America, and Wells Fargo.