This week I reported for BlackEnterprise.com on one black executive's three-year journey to create an online bank that would be funded largely by black churches and average-Joe investors and would serve African-Americans in cyberspace. That journey ended when the lead investor in the deal couldn't come up with the cash before a federal deadline forced the bank to have to pull the plug.
Online banks these days are doing pretty good business and they're well-liked by consumers because they kick back interest rates in the 4 to 5 percent range on savings accounts and don't force you to change your arrangement with your regular bank to do so. But with that said, even the man who wanted to start this particular bank acknowledged in my story that there were always questions about whether starting a "community bank" aimed at black folks was the most pragmatic thing to do. After all, brick-and-mortar community banks are competing against the Bank of Americas of the world, and on the Internet, there is no real physical or well-defined ethnic community as there in the real world. So the question stands: how many of you think a black-targeted online bank will eventually be started and survive? And how many of you would use it? Let us know in the comments section.
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6 comments:
It can be done, once someone makes sure all their ducks (no pun intended) are in order.
Will people use it? Hard to say. There's a general distrust among black people when it comes to anything black-owned (a whooooole other conversation onto itself). There's also the issue of the digital divide, with a population of black people lagging behind the rest of the world when it comes to connectivity. But done right and marketed effectively, a black online bank has the chance to stand on its own.
Would I use it? As with any new business, I'd have to see some evidence of staying power first.
And besides, PNC hasn't let me down in 7 years.
yesh, its possible, especially with how difficult it is these days for blacks to get banking accounts.
and i think it may be needed. i am almost surprised that it has not been done yet.
On the one hand, I definitely think that such a bank could survive. It's about educating the black community on the benefits of such a bank...banking period. That's the road block. Ignorance.
On the other hand, the bank could be doomed before it starts just because the black community has a bad taste in it's mouth about black owned businesses. Me and a few friends were just having this discussion. How you try to support BOB's but they treat you like shit and their never up to par like their white counterparts. Is this true of every BOB? Probably not. But, the bad taste is still in a lot of folks mouths.
Me, personally, I'd support. If it's secured by the FDIC they have my vote...period.
I think it depends on what kinds of perks are being offered.
For me, the appeal of online banking is the larger APY attached to savings or checking accounts than at traditional banks. Anywhere my money is making money is somewhere I'm going to consider taking my business.
I am one who would start black business. But the problem with this venture is that for some reason black people don't trust black people with their money or with any institution that has not been really established.
People will be gun shy in this Enron like era.
how many of you think a black-targeted online bank will eventually be started and survive? And how many of you would use it?
I agree with Duck. I remember back in the day my church wanted to start a credit union with other black churches. It seemed like a good idea, but even with the COGIC blessing, I kept my money at the bank I'd been in forever. (Said proposed bank never did get off the ground by the way.) It wasn't that I didn't support the effort, but when it comes to my money, I'd like to invest it - or store it - in something predictable or that at the very least has proved reliable. Don't need my savings going down the drain because my bank goes belly up, ya know?
I think if anything, a black-targeted online bank has the possibility of being accepted by our generation, but not our parents. My mother barely trusts the online banking we do with the credit union we've been members of for years. As for me, I'd use it if, as others have said, it's been established and I'm sure my money is secure. But I think for good measure, there would also need to be a physical branch within the city just to provide people with that extra sense of security.
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