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Updating Retail Bank Merger Review for the Internet Age

Nicholas Hill, Sheridan Rogers, Mathis Wagner
Antitrust
April 2020
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The steady growth in banking that uses personal electronic devices is mirrored in the growth of consumers who use a virtual bank. The growth of virtual banks—which now account for almost six percent of all deposits—has important consequences for analyzing retail bank mergers. Partner Nicholas Hill, Consultant Sheridan Rogers, and Manager Mathis Wagner, along with co-author Mark Botti, note that regulatory agencies have yet to respond to this evolution. They find that current methods for analyzing retail banking mergers systematically underweight the competitive influence of virtual banks, resulting in biased concentration estimates.

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