It seems that community banks are under siege. From new and more stringent regulations to the presence of fintech startups to widening demographics that demand more personalization than ever before, it’s gotten harder and harder to stay relevant and compete. Innovation has to take into account the hard trends shaping our marketplace and set aside the space to anticipate and build foresight.
The challenge is exacerbated by the fact that the megabanks seem to have recovered their shine. It wasn’t that long ago (2014, to be exact) that a three-year study of the large and important Millennial demographic revealed the least-liked and least-trusted brands overall were big banks. Among these individuals, 71% ranked going to the dentist above listening to what a large bank had to offer. [1]
But at this point, the large banks have found a way to repair those relationships. In fact, they are leading the way in technology innovation and customer service. In short, they are ahead of the curve in addressing key hard trends like technology, evolving demographics, and even boundary-less markets. They’re meeting customers where they are with the services and channel options they demand. It’s a level of advanced engagement that requires a lot of strategy.
How do community banks survive?
Survival begins with acknowledging a few truths. Change is here, it’s accelerating, and it’s impacting every corner of your institution. Your customer base is no longer limited to the people who live in your physical community, and they’re more insistent than ever that you understand their unique needs and personalize their experience.
That means that it now matters less where your bank is located than it does how well your leadership resembles your customer base. Your ability to employ the appropriate technologies will underpin your ability to communicate and serve. Community banks can’t out-invest the large banks. But if you have a clear sense of what your customers want and need, you can partner with other service providers to offer a high quality, competitive experience for your customers.
And perhaps most important – every key member of your team, from the board and c-suite to the service floor must work together to anticipate and address challenges and opportunities with vision and agility.
The future is in the (collective) hands of your leadership team.
Creating a foundation for success may take some organizational transformation. But the good news is that you can address your most important priority with relative speed. Institute a strategic, well facilitated collaborative planning meeting with senior management and the board of directors. This single step is perhaps the most important to building consensus among your decision makers about what is (and isn’t) most vital to the future of your bank.
Putting your priorities in place creates a plan and a benchmark for measuring progress. The process also begins to shape how your culture will acknowledge and respond to the increasingly complex environment. It clarifies roles and builds accountability. And ultimately, this discipline shifts the positioning from ‘drinking from a fire hose’ reactive mode to anticipatory and nimble.
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[1] Financial Habits of Millennials in Four Charts, National Journal, 2014