Magazine article American Banker

Distrust of Large Institutions Makes This the Year of the Community Bank

Magazine article American Banker

Distrust of Large Institutions Makes This the Year of the Community Bank

Article excerpt

Byline: Drew McKone

Between the cross-sales scandal at Wells Fargo, a record-breaking data breach at Yahoo and a tumultuous election season complete with "fake news" and "alternative facts," it is no wonder that consumers' trust in large organizations continues to decline.

For the banking industry, this level of distrust poses a huge challenge. In the eyes of the consumer, it would be easy to assume that nearly all institutions engage in some of the unsavory practices we saw at Wells and elsewhere. As bankers, we know this is untrue and hope that our customers do as well. But instead of assuming the role of the victim, community banks need to turn the challenge into an opportunity. We must use what happened at Wells Fargo as a teachable moment to affirm what differentiates us from big banks.

Community banks should now jump at the chance to show consumers and policymakers the good that banks can do.

Just as locally kept businesses differ from national conglomerates, community banks are inherently different from the big banks. We, local businesses, depend on relationships more than volume. We know our customers by name and we make banking and lending decisions down the street from where our customers live and work, not from across the country.

Even in today's quick-fix world motivated by technology advancements, many bank customers still seek out old-fashioned customer service. Indeed, more than half of consumers prefer to interact with their bank in person, according to a report from TimeTrade. …

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