Various subcultures strive to create the most developed infrastructure for their participants. On the one hand, this contributes to the cohesion of different communities, providing them with the opportunity to immerse themselves as fully as possible in their chosen subculture.

On the other hand, this offers additional opportunities for businesses that occupy this niche and receive a target audience willing to use their services. It is, therefore, not surprising that in recent years, due to the development of online financial services, a large number of niche banks have emerged. What is a niche bank, and is it worth using their services?

Features of Niche Banks

Traditional banks perform an essential function in society, but they receive a considerable dose of criticism. They are accused of being conservative, bureaucratic, arrogant, etc.

Therefore, other financial institutions, more democratic and accessible, began to emerge as an alternative. Some of these financial institutions are niche banks that focus on certain lifestyles. For example, these could be banks targeting the following audience:

  • Golf lovers;
  • Environmentally conscious individuals;
  • Medical professionals;
  • And even fans of musicians, for example, David Bowie.

Using the services of such banks can cause pleasant emotions if you are immersed in some subculture. However, if your priority is optimal financial service, it is better to pay attention not to the external attributes and stylish advertising products but to the conditions provided by such banks. For example, if you need a short-term loan, using the matching services of Payday Depot platform you can compare the conditions of different lenders and choose the lowest interest rate, soft loan repayment terms, etc.

On the contrary, if you prioritize the style component of the service, you may get unprofitable credit terms. Niche banks, aware of the affection of their consumers, can set unfavorable loan conditions, feeling like monopolists in their niche.

Should You Trust Niche Banks?

When choosing a financial service provider, you must carefully study all documentation relating to its work. First of all, make sure that it is FDIC insured:

  • Federal Deposit Insurance Corporation (FDIC) has a 90-year history of helping bank customers survive bank failure should it occur. The deposits of each bank customer, if that bank is FDIC insured, are insured for up to $250,000 per institution. Therefore, with such insurance, you can safely trust a niche bank.
  • If the bank is not insured by the FDIC, the relationship with it is more risky. And here, you should weigh more carefully whether it is worth risking your capital for the desire to feel connected to a certain subculture through the services of a niche bank.
  • Also, note that niche banks may be affiliated with a larger bank. They can be purposefully created by large banks to attract additional target audiences. In this case, it is important that you do not have an account with this large bank, since the FDIC provides insurance for the specified amount for each individual bank. And if your niche bank is affiliated with another, you will not be able to get two separate insurances but only one.

The financial services market tries to please its consumers not only with profitable offers but also with intangible values. One of these is lifestyle, which is actively exploited by niche banks to attract customers. But following your passions, remain rational and carefully study the conditions that such a bank offers to its customers.