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The battle for retail customers appears to be intensifying, with banking market leaders going to war with new free-checking programs.
What once was a rarity is now the norm as five of the six largest banks operating in the Delaware Valley offer free checking, with Fleet Bank the exception. And Fleet is trying to sell customers packages of services bundled together packages that often include free checking.
Why the interest in free checking?.
"We believe the checking account is the centerpiece of the relationship with the customer," said Carl Lisman, an executive vice president who oversees retail banking for PNC Financial Services. The Pittsburgh-based concern recently implemented free checking.
Gordon Goetzmann, managing vice president at First Manhattan Consulting Group in New York, said banks, especially large ones, were enamored in the late 1990s with seemingly higher profit-margin operations such as investment banking, capital markets and investment management. When some of that failed to live up to its promise, compounded by a struggling economy, the focus returned to retail banking.
Goetzmann said a survey his firm conducted of the nation's 40 largest banks showed that 95 percent believe retail banking will be their most important source of revenue growth in the next two or three years.
"This is a product that's here to stay," agreed Nancy Bush, an independent analyst who run NAB Research LLC in Annandale, N.J.
Ken Thomas,...