Market Share Gainers and Losers

Regulatory changes and financial innovations in recent years have fostered increased competition within the banking industry and, indeed, among all financial institutions. New payments powers extended to some thrift institutions permit third-party payment services, which formerly were the exclusive domain of commercial banks. Savings and loans, mutual savings banks, and credit unions compete directly or indirectly with commercial banks for transaction accounts through new services, such as negotiable order of withdrawal (NOW) accounts, share drafts, and remote service units. This more competitive environment has altered the rate at which deposits grow at individual financial institutions.