If they doubt that the firm or its employees are truly interested in making the customer’s money grow, rather than claiming as much of it as possible in the form of fees and bonuses, they will be reluctant to deal with financial firms. These are just two examples of the way in which consumers’ trust in financial firms can break down.
This potential opportunity for niche banking could have certain benefits, as clients and investors, because of the fear of contagion, seek institutions that are specifically not involved in multiple markets and activities. And local banks can often provide more personalized service and have a better understanding of their clients' needs.