Community Banking – A Growing Alternative
Whether you’re looking for personal banking services or small business loans, finding the right local bank can make all the difference. Look for the ones that support their community by hosting financial education courses and sponsoring local awareness initiatives and events. These banks answer to Main Street, while megabanks often convene loan-approval committees that are based in another state.
Faster Decisions
In a time when many large banking institutions are offering cookie-cutter services and inefficient processes, community banks offer the opportunity to work with local bankers who take an active interest in their customers’ well-being. When your bankers grew up, live and work where you do, they have more insight into the unique market conditions that impact both personal and business financials. This level of understanding enables them to give more personalized guidance on your journey toward financial stability and success, because they are your advocates with the community at large.
The fact that most community banks are privately owned also makes them less beholden to the demands of shareholders thousands of miles away. This allows them to weigh the interests of their local communities, their employees and their customers in a different way than large financial institutions that are publicly traded.
This difference also translates into community banks being more nimble when it comes to lending decisions. While this doesn’t mean that they are more likely to approve a loan for someone with a poor credit history or even those who can’t meet the strict criteria of large national banks, it does mean that community banks are more willing to consider other forms of financing that can help people and businesses succeed.
Community banks’ deep knowledge of the local economy also allows them to make quicker decisions when it comes to loan approvals. This can be especially important for small businesses that are in need of capital to purchase new equipment or expand into a larger space. Unlike large, national banks that must gather a committee to evaluate applications for a loan, community banks are more often able to get loans approved quickly so that companies can seize opportunities in their market.
Having a banking partner that knows your company, understands your goals and needs and works to ensure your financial success is incredibly valuable for both individuals and businesses alike. The kind of personalized service offered by community banks is a welcome change to the cookie-cutter approach to banking that many big companies are offering, and it’s something that more and more people and businesses are looking for as they seek out a financial institution with its roots firmly planted in their local markets.
Personalized Service
Community banks can offer the same services big bank customers expect, including business and personal banking. However, these institutions are different from the megabanks in that they prioritize local needs over profit-seeking and often have smaller, more intimate relationships with their customers. According to Kin + Carta’s O’Neill, “Community banks are known for their personalized service, and it’s a real differentiator from enterprise banks.”
Because they’re embedded in their communities, community banks have an intimate understanding of their customers and their needs. This allows them to provide better recommendations than their larger counterparts. For example, a community bank may consider a borrower’s family history and discretionary spending when making loan decisions. Megabanks, on the other hand, use impersonal loan-qualification criteria that doesn’t take into account a borrower’s individual circumstances.
In addition to the personalized customer service, community banks also prioritize putting money back into their local economies and communities. This makes them a more attractive option for many consumers who are tired of the cookie-cutter approach to banking offered by large, multinational banks.
While it’s true that some community banks have struggled to keep up with technological innovation, this is changing. As high-street branches close and more people move away from in-person banking, community banks are taking advantage of the opportunity to offer more customized financial services while still remaining local.
Additionally, community banks can offer higher rates on savings accounts and certificates of deposit than their bigger competitors. This is because they have a more in-depth understanding of their customers and aren’t focused on maximising profits for shareholders.
While the banking sector has a poor reputation, this is largely due to megabanks and their pursuit of ever-increasing profits, which can often mean neglecting the needs of their clients. Smaller, locally-focused community banks are offering an alternative for those who want to avoid the frustration of long wait times at call centers and inconsistent information online and over the phone. In addition, those who want to earn a higher rate of return on their investments and contribute to the growth of their local economy should look into a community bank.
Local Expertise
Unlike the national banks that operate nationwide branch networks, community banks prioritize their local communities’ success. They are privately owned and do not have to report to stockholders, so they can make decisions that align with the long-term interests of their local customers and communities. These decisions include reinvesting in, giving back to, and getting to know their communities from within. This allows them to better understand their unique financial needs and provide solutions that work for them.
Community banks are also more likely to offer lower interest rates on loans, meaning you can save money by banking locally. They are also less prone to risky investments and more connected to the local economy, making them more likely to anticipate economic trends and adjust accordingly.
In addition to reinvesting their capital, many community banks are actively involved in supporting the businesses and nonprofits of their local community. This support often comes in the form of sponsorships and education programs that help small business owners thrive, boosting the overall local economy.
Locally owned banks are also better equipped to identify underserved groups in the local community. Whether it’s minorities, women, or other underserved communities, community-based banks can create and offer financial products and services that meet their needs. They can do this because they have a deep understanding of the local economy, as well as personal relationships with members of the community.
As a result, community banks are better positioned to deliver on their promises of providing personalized service. They can do this by offering free accounts and limiting monthly fees, including those for ATM withdrawals and overdraft charges. Additionally, they can provide personalized advice and help you reach your financial goals with the right banking solution.
Personalized customer service is one of the most important things to look for when selecting a bank. Unfortunately, it’s easy for big banks to lose sight of their customer base when they focus on maximizing profits. Fortunately, community banks are dedicated to the long-term success of their local communities and can take pride in their service.
Greater Access
Community banks focus on delivering a broad range of financial products and services. They offer flexible lending options; different ways to save for the future; and a variety of checking accounts that are designed for the unique needs of their clients.
Additionally, many community banks have a strong track record of helping underserved communities. They understand the economic challenges facing minorities, women, and other underserved groups in their local areas. This gives them a level of insight that outsiders who are simply moving into an area cannot match.
Moreover, community banks often work with local businesses to help them grow and succeed. They have a deep understanding of the business environment, which allows them to develop strategies and programs that are tailored to the specific needs of local businesses. Whether it is helping a small business expand, providing guidance on cash flow issues, or helping a local family purchase their first home, community banks provide invaluable guidance and support for the economic development of their local communities.
Another advantage of community banking is that it can be more efficient than some larger banks. This is because smaller bank teams can make decisions more quickly and efficiently, and they are also better able to understand their clients’ unique situations and needs. In addition, they are less likely to get bogged down in bureaucratic red tape.
However, there are some limits to the convenience of community banking. For example, if you travel frequently for work and prefer a nationwide network of ATMs, then a big bank might be a better choice for you. In addition, some community banks may not have a full suite of technology tools that are typically offered by large banks, such as digital financial assistants and international money transfers. In these cases, it is important to look carefully at the product offerings of each community bank you consider and ensure that they meet your digital demands.
