Community banks are constantly competing against big banks. To remain relevant, it’s critical that community banks find and capitalize on the competitive edge their unique positions offer. It’s impossible to play the same game as big banks and expect to win. However, with a unique strategy that leverages the advantages offered by community banks and credit unions, customers can be drawn to a local choice.
Community banks can offer customized services for a better banking experience.
Larger banks do what they can to provide a well-rounded service, but it’s a cookie-cutter approach that forces local branches of large banks to conform across regions, not taking into account differences in the local communities they serve. Large banks are rarely attuned to the needs of the individual banking customer, focusing more on quantity than quality. But customers of every generation, from Baby Boomers to Generation Zers, want a trusted financial advisor. They don’t want a pamphlet on services or a web page on APRs. They want their bank to know who they are and what they personally need to do to improve and manage their finances.
Community banks deliver exceptional bank customer experiences by being able to recognize their individual customers and know who is looking to buy a house, expand their family, or perhaps go back to school. A large bank does not have the resources to personalize and customize services, which is where community banks can excel.
Community banks must prioritize relationships.
Taking any type of financial risk is extremely personal, but large banks can only assess risks based on numbers, making the relationships community banks build with their customers crucial. Community banks get to know long-time customers in their communities and may be able to offer creative financial solutions that fall outside a big bank’s cookie-cutter approach. Build loyal customers for life by giving opportunities to people who may otherwise not be able to qualify for a loan.
Community banks must be easily accessible.
One significant deterrent that customers experience with big banks is the struggle to find assistance. If there is a problem, finding a staff member that has the answer can take a long time. In our surveys, we see that “getting the runaround” is often the first- or second-most-important reason that defectors left their banks. In Boston and New York City, for example, almost 30% of big bank customers report getting the runaround by a bank staff member. This does not even include the frustration of trying to find answers online, or hold times on the phone, all before getting the runaround in the branch. If a community bank can streamline their processes, reduce hold times for phone calls, make sign-ins on mobile apps easier, and hold convenient hours for personal appointments, community banks can deliver the kind of bank experience that allows them to attract and retain more customers.
Community banks must provide a banking experience that every consumer will remember. By knowing your customers, not just as account numbers but as people, you will find a very special niche with which large banks find difficulty competing. Yes, a digital infrastructure is still important as consumers want their banking services available by any avenue that is convenient for them. However, it is knowing individual needs and providing customized services that will make your community bank stand apart.