Don't trust the banking industry? Boston-based online-only bank PerkStreet Financial wants to change that
By Kevin Clang
People don’t like banks. It's the one issue on which even Tea Party members and Occupiers can agree. A recent Gallup poll found banking to be one of the lowest-trusted professions in the country. Due to bailouts, $5 ATM fees, and other charges for simple convenience, banks and bankers have lost the trust of the public.
This sentiment is a far cry from the days of George Bailey, the hero of the classic film It’s A Wonderful Life. Most fondly recall that when the beloved Bailey found himself down on his luck, the citizens of his town willingly and joyfully save him -- but few remember that Bailey was a banker. You'd be hard-pressed to find that kind of reaction to a closing bank or bankrupt banker today.
But Boston’s PerkStreet Financial is trying to change that image and become a bank for the modern world. An online-only bank founded in 2009 by current CEO Dan O’Malley, a former credit card executive who was upset with the direction in which he saw the industry heading, PerkStreet is designed in part to “put customers and bankers on the same side of the table once again,” O'Malley said. In three short years, the institution has evolved into one of the fastest-growing and most-liked banks in the country and a top startup in a city full of them.
PerkStreet has been fairly successful for two reasons: They focus on customers, and they take advantage of the internet. “We created PerkStreet to be a city on a hill, an example of how a financial institution could improve lives and make an incredible financial return at the same time," said O'Malley. "We knew that the power of digital could make it happen."
The effort is paying off. According to PerkStreet's data, 30 percent of the firm’s new customers come from referrals. In 2011, My Bank Tracker dubbed PerkStreet not just the top online bank in the U.S., but the top bank period.
Those rave reviews and awards might have something to do with the perks (pun intended) that PerkStreet customers receive -- namely, cold, hard cash and great service. Instead of setting up branches on every block, PerkStreet gives their customers free access to the largest ATM network in the country -- over 41,000 of them nationwide. To make sure their customers always have someone to talk to, PerkStreet set up 24-hour call centers all over the country.
“We take all the money our competitors are wasting by maintaining branches on the best real estate in town, and we give it back to our customers,” said O’Malley.
PerkStreet has found that the community it needed to thrive just happened to be online rather than down the street. “[Our online community] is very personal and friendly, and it's highly active," said O'Malley. "We have one of the most active followings among banks and financial services companies in the world,” including one of the most-liked financial institution Facebook pages and a daily company blog, where customers can submit their own posts. To date, it's home to over 600 user-submitted articles.
“PerkStreet has taken the the community banking experience into the online community, and I'm really proud of what we've done there," said O'Malley.
The bank is also committed to honesty. PerkStreet is one of several banks helping support SlashDeclare.Org, a website where customers can interact with banks and share their thoughts on their financial rights in order to "level the playing field" and "restore trust in financial services," according to the site.
Ten years ago, less than 1 percent of the U.S. population used an online-only bank, O'Malley said; today, nearly 20 percent do so.
"Bank of America can continue being the Borders of banking," said O'Malley. "We’re becoming Amazon.”
If you hear a bell ringing, it could be the financial services industry getting its wings back.
About Kevin -- I've spent the past three years honing my journalistic skills, telling people's stories across various forms of media, helping launch an online television network, learning all aspects of social and new media, editing a Student Emmy Award-winning sports show, planning and running concerts for nationally recognized artists, and recruiting volunteers for a candidate for the U.S. House of Representatives. I'm focused on bringing traditional media into the future. Twitter: @kevclang
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