Most of the US banking sector is owned by a small number of companies[1]. Now I don't live in the USA so I can't speak for the USA in particular.
However, I have lived in Australia, where the banking competition is so bad that the consumer protection agency is having to explain in baby words to the national banks why they can't gang up on apple pay[2].
I have also lived in Iceland, a nation in which essentially all industries exist in tiny vertical monopolies, and the banks are no exception. It's hard to link citations here because fólk lesa ekki Íslensku[6][7], but go ask an Icelander if they think the national banks are in vigorous competition, they'll laugh in your face. Landsbankinn was genuinely shocked and puzzled when I moved all my accounts to Arion because they wouldn't give me a visa electron card so I could buy things off the internet.
That having been said, some quick[3] googling[4] suggests[5] that the USA isn't in great shape when it comes to competition either. In general, consumer competition is poor among banks, and they like it that way.
There are 6,799 federally insured banks in the US; it's an extremely competitive market compared to anywhere else in the world. They're also constantly competing against non-bank lenders and P2P lending marketplaces.
If you have a better algorithm of determining credit risk you can make a lot of money undercutting the competition on the right borrowers.
However, I have lived in Australia, where the banking competition is so bad that the consumer protection agency is having to explain in baby words to the national banks why they can't gang up on apple pay[2].
I have also lived in Iceland, a nation in which essentially all industries exist in tiny vertical monopolies, and the banks are no exception. It's hard to link citations here because fólk lesa ekki Íslensku[6][7], but go ask an Icelander if they think the national banks are in vigorous competition, they'll laugh in your face. Landsbankinn was genuinely shocked and puzzled when I moved all my accounts to Arion because they wouldn't give me a visa electron card so I could buy things off the internet.
That having been said, some quick[3] googling[4] suggests[5] that the USA isn't in great shape when it comes to competition either. In general, consumer competition is poor among banks, and they like it that way.
[1] https://hbr.org/2016/06/one-big-reason-theres-so-little-comp...
[2] http://www.abc.net.au/news/2016-11-30/accc-rejects-the-banks...
[3] https://www.justice.gov/opa/pr/five-major-banks-agree-parent...
[4] http://www.reuters.com/article/us-banks-rigging-lawsuit-idUS...
[5] https://www.bloomberg.com/news/articles/2015-12-05/banks-sai...
[6] no one reads Icelandic
[7] please critique my grammar, I'm guessing here :(