What might happen if a state is not recognized by other states?

If a state is not recognized by other states then it is isolated culturally, economically, educationally, and militarily (to name a few). There would be no trade for products requiring the state to be self-sufficient. Food crops would need to be grown in great quantities to feed the entire population. Manufacturing would be required to clothe, house, service everyone. This magnitude of isolation would prove detrimental to the populace.

The advantage of banking with national retail banks is that they charge fees for many services.