We’ve recently hired several more people, and in this process I asked one of them . . . Tony Johnson, our new Data Security Analyst, to write an essay for me. Yes, this person had to write an essay to get his job.  But we’re looking for people who can “speak and write” and I offered him a chance to prove his writing capabilities. I asked him to tell me why community banks are good Clients.  Here was his response:

Introduction

In today’s rapidly growing and evolving financial environment, community banks are much more than offices and places for stockpiling our cash – they are the heartbeat of our communities. Let’s take a look into why community banks matter more than we think.

Personalized Banking Services

To begin with, these community banks know you, your pet, and even your favorite hobby with a familiar smile, something a big bank cannot offer (Wang et al., 2022). When you approach a community bank or become involved with one, you are not just a number on a list, but part of a family, which makes a significant difference. People are more likely to do business with financial organizations when they receive individual attention and relationship banking. Community banks offer tailored services that their larger counterparts cannot. From my own observations when visiting a community bank, it was clear that workers address their customers by their first name and understand their financial status, family members, and hobbies. This creates a personal touch in establishing a long-lasting relationship of trust, loyalty, and mutual respect.

Competitive Fees and Financial Solutions

Additionally, a key advantage of community-based banks is their ability to offer cheaper fees than big banks. They provide various financial solutions and more personalized services, making banking accessible to everyone, including small businesses, startups, and dreamers with big ideas (Bednarik & Marshall, 2024). From my experience working at bigger banks, I know they often have a higher chance of saying no to the little guys, but community-based banks roll out the welcome mat. They understand that when small businesses succeed, we all succeed. This approach supports financial inclusion, fosters entrepreneurship, and significantly advances financial solutions for all.

Local Development and Community Impact

Community-based banks are essential in developing local areas. They use customers’ deposits to provide credit guarantees that finance development (Fayman et al., 2021). This reinvestment boosts the economy, provides employment, and improves the standard of living in the community. With their knowledge of the local area, community banks can make decisions that directly impact the community. By understanding and addressing their customers’ specific needs, they can effectively encourage local development.

Efficient Decision Making

Community banks are often more effective than big banks in decision making. They are recognized for their small size, adaptability, and responsiveness in providing financial services (Jacewitz, 2022). This allows them to quickly address their clients’ need for funds and offer prompt financial interventions without the delays caused by overhead formalities. Unlike big banks, which often take time to approve loan applications due to numerous protocols, community banks can approve loans as customers request. This responsiveness is essential for businesses and individuals who need money quickly. By enabling businesses to seize opportunities and manage their economic requirements efficiently, community banks support a flexible money market.

Financial Education and Community Empowerment

Furthermore, community banks are like friendly neighbors who not only handle money but also teach people how to manage it. They hold workshops on making budgets, saving money, and investing wisely. This helps folks in the community learn how to handle their finances better. Unlike big banks where you might feel like just a number, community banks take the time to educate their customers. This helps people make smarter choices about their money. By doing this, these banks help make the community stronger and more prosperous.

Conclusion

In the end, it all boils down to this: Community banks are not just important, they’re essential. They’re the glue that holds our neighborhoods together and the guardians of our financial well-being. So, the next time you’re thinking about where to deposit your hard-earned cash, remember this: the best place to keep money safe isn’t in a vault. It’s in the hands of your friendly neighborhood banker.

References

Bednarik, Z., & Marshall, M. I. (2024). Personal relationships of rural small businesses with community-based banks in times of crisis. Journal of Small Business and Enterprise Development. https://doi.org/10.1108/jsbed-04-2023-0196

Fayman, A., Chen, S., & Mayes, T. (2021). Community banks versus non‐community banks: Post the Great Recession. Economic Notes, 51(2). https://doi.org/10.1111/ecno.12196

Jacewitz, S. (2022). The Increasing Brick-and-Mortar Efficiency of Community Banks. The Federal Reserve Bank of Kansas City Economic Review. https://doi.org/10.18651/er/v107n2jacewitz

Wang, W., Huang, J., Wang, H., & Alidaee, B. (2022). Internal and external analysis of community-based banks’ performance. International Review of Financial Analysis, 84, 102409. https://doi.org/10.1016/j.irfa.2022.102409