Keeping The Community Bank Feel as You Grow

Community banks have long been pillars of the local community, intricately interwoven with its small businesses, governmental entities, and the everyday lives of its citizens. In fact, community banking represents approximately 90% of all banks in the US! In today’s highly competitive and fast-moving financial services environment, growth is at the forefront of everyone’s minds. But how do you grow while still retaining the character and personality of the community bank? Tom McGill, PRI Director of Customer Experience, recently reflected on ways to retain the community bank feel while achieving growth goals that allow the institution to continue serving the community well into the future.

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I once worked for a man whose mantra was, “Grow or Die.” As Major League Baseball Opening Day nears, perhaps a bit of Satchell Paige would be more comfortable. Satchell said, “Don’t look back. Something might be gaining on you.” In the competitive space of financial services, growing is a key indicator of success and looking forward is the proper direction of your gaze.

Consistent growth has never been more important in the community bank space. Pressure is coming from all angles including other community banks, regional and national banks, credit unions, fintechs and increasing regulation. Growing and advancing your organization’s cause while maintaining the essence and character of your community bank can present a challenge. Here are a few thoughts on how to maintain your grounding:

• Refresh and reinforce your mission, vision, and core values. Don’t just focus on the words but on demonstrable behaviors – or Reasons to Believe – and then make sure that those stories are shared throughout your organization. Often this can be done as part of a strategic planning session, sometimes as a marketing initiative, but the successful ones always have a top-down commitment and a focus on what your institution’s unique “why” is. That “why” should shine through in every customer, employee or community interaction.
• Stay focused on your community. Double down efforts to engage with your community members through all types of outreach. Be visible, be approachable, be a neighbor. Carry that attitude through to your in-branch interactions. Focus on long-term relationships and demonstrate your commitment to the community by investing in loyalty programs, financial education initiatives and training programs for young people hoping to enter community banking as a career. Encourage your employees of all levels to be leaders in the community and celebrate them for their active participation.
• Don’t forget your employees. The best community banks have an internal culture that values all individuals in the organization. While organization charts and job descriptions are an important necessity, community banks can be nimble and identify and leverage the unique talents of their staff. Make sure you’re living the idea of “be visible, be approachable, be a neighbor” within the four walls of your institution.
• Leverage technology wisely. Bank customers demand a certain level of technology, and the financial demands of running a community bank require the use of technology to manage the bank efficiently and effectively. There are many shiny objects that will come your way. Being prudent in what you choose to pursue is critical. I’m reminded of the myth from during the space race in the 1960s. As the story goes, the US spent millions of dollars inventing a Space Pen that would allow the astronauts to write in outer space. The Russians used a pencil. While the true story is far more complex, the message remains relevant. Evaluate each technology opportunity and ask yourself if you need that technology or if a pencil will do just fine.
• Invest in technology without losing the human touch. And speaking of technology, our last blog The Human Touch in Digital Banking: Balancing Automation and Personalization highlighted how community bank customer engagement can result in increased loyalty, advocacy and customer lifetime value. Emerging technology like AI allows community institutions of any size to know their customers’ needs during their financial journeys and to curate their experiences without spreading the organization’s employees too thin. This kind of personalization, paired with thoughtful human interaction, can increase engagement and allow for greater growth opportunities. In fact, McKinsey & Company found that personalization drives performance and better customer outcomes.

“Furthermore, our research found that companies that excel at personalization generate 40 percent more revenue from those activities than average players. Across US industries, shifting to top-quartile performance in personalization would generate over $1 trillion in value. Players who are leaders in personalization achieve outcomes by tailoring offerings and outreach to the right individual at the right moment with the right experiences.” – McKinsey & Company

Community banks serve a valuable purpose to local economies and the people and small businesses living in those communities. While adaptation is certainly necessary, the values of your individual community bank must remain a primary filter to your decision making and must be repeatedly reinforced to make sure that your entire organization understands not just what you do, but why you do it. 

Resources:

The value of getting personalization right—or wrong—is multiplying – McKinsey & Company

The Human Touch in Digital Banking: Balancing Automation and Personalization – PRI

Profit Resources specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.