I like this idea almost too much to post it. But what the heck. This idea addresses a pressing need of the disappearing little banks. These little banks find it tough to compete with the BankAmericas because, well, because they are small and don't have the branches and free ATM outlets, etc. Tellers and offices and ATMS are expensive.Unibank is a retail teller outlet for small independent banks. Banks contract for teller, ATM, and back office services for less than what it would cost the bank. Unibank has branches conveniently located all over town (and all over the country), offering the services of many little banks. The Unibank lobby displays the logos of all the banks they serve, and the service is great.
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How is Unibank different from the big banks? Are you thinking of something along the lines of the Star Alliance or OneWorld where airlines have bound together to offer more seamless service to customers?
In the free market, what benefit does the consumer have if using Unibank (I'm Canadian, and here the Central Bank decides who can operate a bank - there are only 4 licenses). If Unibank is offering all the services, isn't the local bank now operating just as an outlet for Unibank?
Pedalpets,Unibank is not a bank, it is a company that little banks use to outsource their teller services. It gives the little local bank a big “footprint” like the big banks. It offers economy of scale for the little banks, so that they can offer services to more customers without actually owning many locations. Customers should benefit because it allows the small banks to compete more effectively with the big banks. Right now, consumers think twice about signing up with a little bank because of the inconvenience of getting to a branch or to an ATM, if they should need to. Take me, for example. My bank is a big bank because it has branches and their own ATMs (with no fee for big bank customers) both near where I live, and where I work, and just about anywhere else in town I might happen to be. However, my big bank doesn’t offer as high an interest rate, and charges more in fees than the little bank next door.
Unibank is meant to be a profitable outsourcing type business. I think it fills a need, and could eat a bit of the big banks’ lunch.
I like the concept, but a handful of issues would need to be addressed.
1) To operate as a bank, the entity has to have a banking license. This could be overcome by making Unibank an actual bank instead of just an outsourcer.
2) Taking deposits, cashing checks, paying out cash and other bank functions involve risk. It must be decided if Unibank assumes the risk (and therefore guarantees that if a check is cashed that it will be properly funded to the bank) OR if the bank takes the risk. If the bank takes the risk, they will have a difficult time enforcing policies in terms of check cashing procedures, etc.
3) Employee fraud - who's responsible?
4) Legal and compliance - Banks are required by state and federal law to retain records on customers, deposits, etc. They are also required to know with whom they are doing business. Extending this responsibility to a third party requires the bank to take an enormous risk in the event that the third party doesn't follow proper procedures. No bank wants to see their name in the paper as the ones who cashed the check of a terrorist.
Okay, taking this from the point of view of someone running Unibank, it seems awfully complicated, I might as well ~be~ a bank. And being a bank would seem to be more profitable if I already have the infrastructure to service all these other little banks.
From a consumer point of view, I would find a convenience in a large one-stop sort of venue like the existing Walmart Supercenters being able to offer banking services, but I think government regulation prevents this in the case of Walmart, I'm not sure.
And it's funny that ATMs are "expensive", since I presume these are in favor of the bank, ie, lowering labor costs by eliminating tellers. How odd some would charge me a FEE for doing them a favor!
This is a great idea.
In fact, banks should not be allowed to handle "cash" simply because they have more important tasks to perform, namely the "banking services" (whatever they may be, but certainly 'handling cash' is not one). Handling cash, i.e. purchasing (receiving-inspecting), processing (categorizing-accounting-storing-transporting) and selling (delivery-dispensing-disbursing) are all logistics functions and inventory management tasks which could be more effectively managed by specialized "cash-logistics" companies. These companies would buy/sell cash from/to individuals and/or companies on account of banks and/or other depository institutions and the parties will bear/split the cost of service.
The benefits to the customer are many fold:1. Independent patronage: Any bank/depository can utilize cash-logistics services, buy and sell cash for account of their customers.2. Time and place independence: Services could be offered anywhere-anytime.3. Improved productivity: Bank/depository staff will perform better and more productive tasks.4. Better utilization: As banks will not have to bear the cost of idle ATM cash (mostly overnight), this will improve their bottom line.5. Competition: Currently banks do not compete on proviving better and more cost effective ATM services but focus on other aspects of their business elsewhere. Outsourcing ATM-cash to professional companies will create competition in cash logistics business, and this will benefit the customer in general.
Well your idea seems to be very creative. In your point of view it actually seems to support a better deal for the consumer.
Although I don't think the formation of small banks to be of any advantage.
1. This creates a cartel for all these small banks and they get to charge a higher interest compared to before since it's like a monopoly or an oligolopy similar to what the OPEC is doing.
2. What's the difference between a bunch of big banks forming up and these small banks forming up there's no competition to provide a better deal for the consumer. A few years ago large commercial banking institutions tried to form up but the Congress and the Feds didn't allow it due to numerous disadvantages.
3. If these small banks use the Unibank to perform its teller services than the large banks will try to compete with these small banks. While this is going on the big banks will try to cut operation costs and downsize their employment to provide a cheaper deal.
4. Why not have an international bank like the IMF but for commercial purposes if the Unibank becomes proposed. This is because money will be more tightly controlled and regulated by commercial banks and you don't know what kind of schemes they'll pull just to make a buck or two if you give these banks too much power and influence over our fiats.