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Bank Transfer Day: Everybody Wins

Stocks in this article: JPM BAC C WFC BANC

Still, the victory for customers might be short-lived. Industry observers say banks will find a way to charge customers to make up for the shortfall in revenues one way or another.

That's one more reason why customers still fuming from the debacle are seriously contemplating switching bank accounts.

Big Banks Benefit Too

But the big banks might not be too concerned about people defecting. On one level, they are counting on customer inertia. People might be unhappy with their situation but still not do anything about it.

Even if they do, banks like Bank of America (BAC) are betting that they will only lose customers who are not profitable to begin with- the ones who carry low balances. The cost to service those customers outweighs the money they make from them, goes their thinking.

If a bank earns a spread of 75 basis points on a checking account in this low interest rate environment, the average checking account balance should be at least $24,000 in order for the bank to continue offering free checking services, according to Hank Israel at Novantas . But few customers carry those balances.

Which means big banks could actually benefit from Bank Transfer Day as they lose unprofitable customers.

Bank of America and JPMorgan declined comment on the story.

"We respect that consumers have choices when it comes to their banking needs," Catherine Pulley, a Citi spokesperson said. "If a customer wants to close their account, we will accommodate them online, in person or on the phone. But we are proud that customers continue to choose Citi and will work hard to earn their business," she said.

She added that the bank avoided the debit card fee from the start after listening to customer feedback that said the fees were unacceptable.

Citigroup has raised the monthly fees on its checking accounts but offers customers ways to avoid the fee such as making online bill payments and using its direct deposit facility.

Richard Hunt at Consumers Banking Association says small banks also suffer from the impact of new regulations such as the Durbin Amendment as well and that customers should not be misled into thinking that they will get free services if they go to a smaller player. He points to a Credit Union National Association's 2010-2011 Fee Survey that said 91% of credit unions offering debit cards anticipate making some sort of change to their rates, fees and services as a result of the negative impact of the regulation.

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