And when you merge two banks, you save money automatically, because the consolidation means that some of the checks that had to go out to the Federal Reserve or the clearinghouse can be settled immediately. From the financial institutions' point of view, data processing has virtually eliminated the differences between bank deposits and savings accounts, credit card advances and installment loans, money market funds and mortgage bonds, annuities and insurance. Efforts by government to keep these things separate are overwhelmed by technology. The same machines that handle an investor's income from her stocks and her payments to finance them can be used to process her salary checks and credit card bills. Because the consumer has different purposes for her purchases of financial products, there isn't much sense of competition among them.
Some people play the financial system intelligently and successfully.
They grab for tax benefits, illegitimately but successfully, by borrowing on their homes for other purposes. They finance vacations with low-interest margin loans on their stocks. More pay no attention. Historically, banks have competed by the convenience of their branches, not by the quality or price of their offerings. The most profitable activity at any bank is bouncing a check, which costs very little but carries a high fee.