How many banks are in the US? The average person doesn't have a clue.

 

9 out of every 10 people made the same error.

How many banking options do you have? Most people’s assumptions are off the mark.

How many banking options do you have? Most people’s assumptions are off the mark.

How many banks are there in the US?

We invited random people on the street to write down guesses on a piece of paper.  The answers we got were predictably varied, with guesses ranging from 10 to 50,079,000,600. Spoiler: the answer is somewhere in between.

In summary, the average person who thinks they’d have a realistic idea has no idea how many banks there are. And why should they, you might think?

Well we happened to conduct this exercise on the streets of the University of Chicago campus, where the probability that a passerby is coming from or heading into a conversation about some combination of economics, banks, capitalization ratios and market competition is high. So the average passerby would be likely to at least think she has a clue, and she’d enjoy the opportunity to make an educated guess.

To put it another way, our question is like asking a New Yorker how many food carts there are in Manhattan. It’s a question for which many would assume they could at least make a decent guess somewhere in the ballpark, and more likely than not enjoy doing so.  

Because you’re reading our blog -- a banking blog -- we assume you’re in the category of someone who thinks they have a clue.

So let’s see if you’re more informed than the average person.

Up for playing along? Stop scrolling now and guess the number of banks.




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Really, take a guess.

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Somewhere between 10 and 50,079,000,600.

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Got your number?

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Someone playing along, making an educated guess.

Someone playing along, making an educated guess.


There are currently 5,477 banks in the US.* If you’re like most people we talked to, your guess was far too low.

Regardless of whether our participants wrote down their gut reaction or treated this like a market-sizing consulting interview question (yes, that happened), the vast majority of people underestimated the number of banks in the US.

On this poster alone, 30 of the 35 guesses were too low. That means nearly 9 out of every 10 people we talked to thought there were fewer banks than there actually are.

But here’s what really caught us off guard: 74% of people we talked with guessed a number that was less than half the true count.

This means that 3 in every 4 people we talked with were surprised to learn there are more than double the number of banks than they thought there were.

Perhaps this can be explained by a trend that’s fairly well-known: the consolidation of the banking industry. In a globalizing world, big business (or in this case, big banks) buy smaller businesses (or banks).

But despite this consolidation, the number of banks available for the average person is on the rise. How so?

Well, banks today can better compete, irrespective of size, thanks to technology. A majority of banks offer online banking, a growing number offer mobile banking, and more and more are incorporating other technologies for their customers’ convenience, like letting new customers transfer their direct deposits and bill pay from their old bank to their new bank with one click. This means that more people can use more banks than ever before, no matter where they’re located, with little need (if ever) to visit the bank in person.

So yeah. If you use a bank, know there are more than 5,000 others, among which there might be a few that you’d really dig. Banks located in more locations than you may have considered were even open to you.

Just like the lunch you just ate today was perhaps made with ingredients produced near and far, you can consider banks today both near and far, too.

Are you banking with the best bank for your money and values?

Search banks now 


*Data from FDIC, Q3 2018. Non-depository, non-insured financial institutions excluded from this number.