HOW DO YOU KEEP YOUR COMMUNITY BANK RELEVANT?

The Headache: There's a huge amount of noise, evolution, change--call it what you will--going on out there in financial services. One community banker recently said he was sure there were competitive factors he wasn't even aware of, the way things are changing.

Our Question: How can a community bank ensure that it remains relevant to its customers and its community?

Community bankers face their share of challenges, a roundtable discussion of small bank executives recently found. Lots of players want to bite off this piece or that of financial services. Technology is a game where you have to keep on putting up an ante, to remain at the table. Large banks enjoy economies of scale. Dodd-Frank promises to cost big bucks when banks need them for other challenges.

Below is a sampling of what we've heard so far from community bankers. Add your own ideas and suggestions.

And if you would like to join our regular list of "prescribers," to whom we send questions, please email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it today.

Let's hear your views and ideas below! (Editorial Note: Contributions to Pass the Aspirin may also appear in our print edition. While we will ask for your e-mail address, this is only as an aid to verifying identity and will not be used for any marketing or promotional purpose. The e-mail address will not be published.)

Paul Siebenmorgen, president and CEO, Farmers & Merchants State Bank, $923 million-assets, Archbold, Ohio said:

Well-run, progressive, independent community banks are very relevant and able to survive in towns across this country. I like to compare our position to another service industry. For decades national restaurant chains have crisscrossed America just like the "golden arches" of banking expanded coast to coast. Yet, as we travel around the country, each small town still has a good, successful local restaurant that serves a good product with "hometown" service. I believe banks with good progressive products and "hometown" service will continue to compete against the large national banking chains with the same success.

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May 25, 2012
Votes: +6

John Bothof, president, Northwest Bank, Omaha, Neb. said:

Over the last couple of years we have evaluated our marketing efforts and have reallocated them to provide for more image advertising. We emphasize our commitment to service, strength, and the expertise of our talented staff. We have,in the last six months, completed one acquisition and are in the process of acquiring five offices of Bank of America in northwest Iowa. Our ownership is committed to the community bank model that provides top-level personnel as close to the customer as possible with the centralization of processes that do not have direct contact with the customer. Staff must stay involved within our communities and be seen.

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May 25, 2012
Votes: +3

Wesley Sturges, president and CEO, Bank of Commerce, $145.2 million-assets, Charlotte, N.C. said:

Clearly there's still a place for community banks. Only community banks provide immediate access to senior lenders who can serve as advisors to our clients. These lenders give clients direction and guidance and also share financial analysis. At our bank, we emphasize this service through our radio commercials, which are testimonials from businesses that we have helped be successful. We have also offered and advertised our "School of Commerce," which is a program where we invite experts to teach classes to small business owners to help them run their business more successfully.

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May 25, 2012
Votes: +0

William Grant, chairman and CEO, First United Bank & Trust, Okland, Md. said:

There is nothing in today's economy more relevant than a vibrant community banking system. At First United, we focus on our communities every day. While the bank has a commercial focus, we avoid the label of "small business." Rather, we strive to serve what we call the "Community Oriented Business Owner" This could be a business of any size, but would be one where the owner recognizes the community and attempts to serve it through his or her business. The owner is a member of the community and is civically involved?just like First United. This emphasis enables us to remain closely connected to our communities.

We also go an extra step. Recognizing that communities enjoy a high level of personalized service, we endeavor to bring our community-oriented business owners an entire team of bankers dedicated to meeting their needs and goals, whether it is in lending, trust and investments, treasury management, or helping them to better understand their business through informative webinars. We also look for opportunities to serve the employees of our community oriented business owners as they, too, are valued members of the communities we serve.

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May 25, 2012
Votes: +4

Brian Thomas, president and CEO, Clear Mountain Bank, Bruceton Mills, W.V. said:

As a community bank, we encourage our officers, and other staff, to become personally involved in a community non-profit board. At last count, our bank was represented on at least 20 different non-profit boards of directors. We see this as making a personal commitment to the community that many of our larger bank competitors and credit unions do not. While we may not have the capacity to make large monetary donations as a megabank does, we have the ability to provide human capital to solve local problems. To me, this is being relevant--making a difference.

As an example, as a result of our community involvement, we learned of the needs of a local homeless shelter. We financed a new four-story housing facility for homeless families within the community. One of our senior officers also agreed to chair a new capital campaign for that organization as well.

This type of involvement keeps the bank informed about the needs of our community as well as connected to other leaders in the area. It makes us relevant.

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May 25, 2012
Votes: +5

Thomas L. Jensen said:

You can only be relevant if you are here. We have been in business for 136 years, and everyday we focus on being relevant for the next 136 years.

We feel that community banks will be around not because of what we have to offer. Let's face it, technology has leveled the playing field for community banks. What really sets us apart from the mega-banks is what we give back to our communities. Community involvement, volunteerism, and service makes community banks relevant in the communities we serve.

I often ask our team to close their eyes and picture what the community and events would look like if there was a "pick your mega-bank" sign displayed out front. It takes them about 10 seconds to start smiling. The light bulb has gone off and they truly understand the importance and relevance of remaining a community bank.

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May 25, 2012
Votes: +2

Neal Reynolds said:

Community Banks can remain relevant, but they'll have to adapt and keep up with the changing times.
The local record stores, movie rental stores and book stores are all going out of business, thanks to Amazon.com, Netflix.com and iTunes.
The great news is that community banks have access to all the tools necessary to compete. There are a lot of vendors and core processors that offer everything that the big banks have. A community bank's biggest asset is their people. When a person has a financial need, there's always a need for well trained employees. My son, who is trying to buy his first house, went into the local Bank of America to get pre-approved for a mortgage. After waiting 30 minutes for a "customer service rep" someone showed him to an empty office, dialed an 800 number and handed him the phone. That's his last trip to Bank of America.
Here are ten things a bank needs to do to stay relevant:
1. Offer the latest in banking technologies.
2. Get aggressive about marketing those capabilities
3. Offer training on those capabilities, including having a "switch coach" to help people switch banks.
4. Train employees on how to sell these services.
5. Have an outreach program where employees call potential customers and ask for their business and call existing customers and thank them for theirs.
6. Send an old fashion thank you card or birthday card. That's my idea of "social media"!
7. Have employees get involved in community activities. It's better to have a bank employee lead a girl scout troop, than for the bank to buy their cookies.
8. Train employees on how to cross sell other products and services.
9. Develop a "cash rewards program" to promote the activities that you want in your employees.
10. Turn off CNN on your lobby TV and start promoting community activities.

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May 25, 2012
Votes: +5

Gerard McAlroy said:

Karl Benz was said to have created the first true automobile, (although we do know there were earlier inventions), his design in 1885 is regarded as groundbreaking, but the car didn?t start to change lives until 1903 onwards when Henry Ford began his mass production.

Air conditioning, another life changing system, although the invention/idea had been year?s earlier, air con began changing the way people lived in the 1930?s.

What do these have to do with banking?

These are classic examples of when life meets opportunity. Yet relatively few people had the presence of mind to take advantage of the changes because they were living in the moment, and not necessarily looking forward. Had they been then I am sure my grandmother would have high tailed it to America and married Henry Ford?s son.

Today in banking we have this opportunity to look at our industry and be in the middle of some of the biggest changes, and decide do we embrace the changes and choose the new revenues the opportunity presents, or do we stay in the ?old way?? Keep our horse and cart and stay hot in the sun without the A/C.

The changes if you look around are not just administrative, (although that is a huge game changer); the changes are being driven by the consumer in the way money is obtained, and the way money is being spent. We can all nod in agreement and admit that we all use our debit card that little bit more, we all receive direct deposit and pay some of our bills online, some of us even have the smart attitude to using our credit cards to pay bills and earn rewards.

When we see this, why then do we think that this would not be a good thing to offer our customers? Why do we have it but not pass it on to them? Why are we afraid to charge for technological advances that keep customers moving forward and save them time?

The last time I wrote a check to pay anything in England was 1986, here in the USA 2012 I still write the occasional check, and many businesses will accept them, but this is changing. In Europe the 1970?s and 1980?s saw an increase in the use of the credit/expense card, and the use of ACH and electronic movement and management of money. These are the tools that people want when they use banking, to help increase efficiency and revenue. Embrace the changes; move forward, this is progressive and permanent.

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May 25, 2012
Votes: +4

Mike Murphy said:

Community Banking is still relevant because of the local decision making, community support through time and dollars, and just the overall economic impact of the loans we make and the payroll we generate.

The real issue is how to become more relevant and more available to our customer and our community. Perhaps, we need to spend more time on figuring out how do they want to use us instead of how we want to serve them?

Bankers tend to jump on the bandwagon of the latest banking service or product that they have seen at the last convention they attended. Sometimes, we forget to ask our customers what they think of the idea before we offer it. And we fail to ask if they'll pay for that product or what value it'll add.

The biggest successes often center in things to make lives easier. Look at debit cards, Internet banking, mobile banking, and remote deposit capture. They are available all of the time.

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June 08, 2012
Votes: +0