Magazine article American Banker

Attention to Fundamentals Will Let Small Banks Survive Industry Change

Magazine article American Banker

Attention to Fundamentals Will Let Small Banks Survive Industry Change

Article excerpt

Few consumers have been able to escape the industry's wave of mergers; it is very likely that a customer's current bank has a different name than it did when that person opened the account.

Though some mergers have been carried out seamlessly, with high levels of customer satisfaction, others have given the press, politicians, and the public the ammunition to assail them with.

As the number of banking choices dwindles, a frequently voiced concern is whether community banks will continue to exist. Will they go the way of the corner grocery or hardware store? I believe the answer is a resounding "no" -- there will always be a place for a well-run community bank.

Though this last decade has brought fundamental changes to the financial services industry, every bank has had both the opportunity and the obligation to analyze what it is and what it wants to become, regardless of size. And though banks' traditional and core businesses have been challenged on many fronts, the driving force behind this change has been customers and their demands for products, service, return, and convenience.

Banks of all sizes have therefore had to reshape the way they do business. If they were unable or unwilling to do so, an exit strategy has been forced upon them.

Community banks can survive and prosper in this financial services environment by putting a high priority on preparing for the future. They will need to identify and take advantage of their strengths: customer service, customer and market knowledge, nimble decision-making, customer responsiveness, organizational communication, and deployment of technology.

Most community bank leaders believe that consolidation has created opportunities. Community banks can take advantage of these opportunities if they remain focused on the fact that as the industry changes they must evolve with it or ahead of it -- never losing sight of the precepts that have underlain their successes. …

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