Banks of moderate size can leverage this select list for heightened visibility and competitiveness
In the ever-evolving world of banking, community banks are adapting to the digital age by leveraging their unique strengths and strategic partnerships.
According to Cetin Duransoy, CEO of Raisin US, embracing solutions and innovation can help community banks grow, compete for deposits, and stay ahead in a digital industry. This is particularly important as a recent survey revealed that only 27% of adults in the U.S. had confidence in the nation's banks, down from 38% in 2020.
One of the key challenges for smaller banks is the high compliance costs. While these typically account for 10% of noninterest expenses for smaller banks, they are only 5% for large banks. However, partnering with fintech platforms can make costs related to digital banking much more manageable for smaller institutions.
Strategically partnering with innovative technology solutions can help smaller banks level-up service and efficiently tap new markets. For instance, over the past few years, many smaller institutions have utilised digital savings platforms like Raisin to source deposits efficiently and competitively.
Community banks play a vital role in supporting small businesses and reaching communities with limited access to banking services. Under the leadership of figures like Tamara Gurney, CEO of Mission Valley Bank, these institutions embody a steadfast dedication to fostering meaningful connections and driving positive change. Gurney has made it her pledge to build and nurture relationships that empower both businesses and the communities that the bank serves.
Ponce Bank, a CDFI founded in the Bronx, has a focus on bringing banking services to areas where help is in highest demand, with 75% of their loans going to people in low- to moderate-income neighborhoods. Similarly, Mission Valley Bank, based in Sun Valley, Calif., prioritizes the financial success of their customers and the well-being of the community, and has initiatives like the Give Where You Live program to support local nonprofit organizations.
Rebranding efforts and hyper-local marketing help community banks strengthen their presence and appeal to customers who value local business support. By investing in customer experience and digital innovation, these banks can offer services that rival those of larger institutions while maintaining their community focus.
By leveraging outsourcing and partnerships, community banks can access modern payment platforms, digital wallets, and real-time payment solutions. Embracing emerging technologies such as real-time payments, embedded finance, and AI-driven customer service, they can offer digital experiences that rival those of larger institutions.
Modern architectures, such as cloud-based platforms and modular payment solutions, allow community banks to offer scalable, secure, and efficient digital services without prohibitive costs. Balancing innovation with compliance is also crucial, and strategic fintech partnerships and robust compliance frameworks ensure that digital transformation occurs within regulatory boundaries.
In conclusion, community banks differentiate themselves by combining local relationships and personalised service with smart investments in customer experience and digital innovation. By partnering with fintech providers and focusing on scalable, user-friendly digital platforms, they overcome resource limitations and remain competitive in a rapidly evolving industry.
- Community banks, such as Ponce Bank and Mission Valley Bank, are dedicated to fostering meaningful connections and driving positive change, especially in underserved communities.
- Embracing emerging technologies like real-time payments, embedded finance, and AI-driven customer service, community banks can offer digital experiences that rival those of larger institutions.
- By partnering with fintech providers and focusing on scalable, user-friendly digital platforms, community banks can overcome resource limitations and remain competitive in a rapidly evolving industry.
- Strategic partnerships with fintech platforms can make costs related to digital banking much more manageable for smaller institutions, enabling them to level-up service and efficiently tap new markets.
