Life is full of choices, and choosing a bank that best suits your needs is one of them. If you’re looking for a bank that has that hometown feel and strongly connects with people, then you should consider a community bank.
So, what is a community bank? Well, generally speaking, a community bank is a relatively small bank that serves a local community. Community banks obtain most of their core deposits locally, and they use those deposits to underwrite loans for local residents and businesses. Many community banks also operate with a focus on charitable work and investment in their local communities.
If you’re thinking of making the switch from a big bank to a smaller community bank, there are many advantages to consider. Here’s a look at some of the perks of community banking:
• Decision-making is made at the local level. Managers at a community bank don’t have to go far up the “food chain” to make decisions on loans and other customer needs. As a result, there’s a good chance decisions will be made fairly quickly, and with less hassle. Big banks typically have more layers of red tape, which can make it harder to get a quick lending decision, get fees waived, or negotiate rates. What’s more, the Board of Directors at community banks are made up of local citizens with a vested interest in the towns and cities where the bank does business. By being firmly entrenched in their local surroundings, community banks have a solid understanding of the needs of the people and businesses around them.
• You’re more than just an account number. Community banks are known for the focused, personalized attention they give to their customers, and for putting a strong emphasis on developing and nurturing customer relationships. In fact, according to a 2017 study by ath Power Consulting, community banks and local credit unions have the highest customer satisfaction among financial institutions. And a 2014 Harris poll found that customers trusted community banks and local credit unions more than large regional and national banks.
• More attractive rates. While the biggest banks certainly have a lot of wealth, large banks aren’t known for passing it along to their customers. According to a 2017 study by DepositAccounts.com, small- and medium-sized banks offer higher rates on deposit accounts than their larger counterparts. Smaller banks generally don’t have the same level of brand awareness that big players like Bank of America and Wells Fargo do, so many of them offer more competitive rates in order to compete and attract new customers.
• More flexibility. Big, national banks typically have stricter lending guidelines than community banks, which can make it harder for customers with lower credit scores or incomes to qualify for loans. Many community banks on the other hand, offer more flexibility and less restrictions with loans. Some even offer special loans or programs to help customers overcome barriers to home ownership, or improve their credit history.
• They give back. Community banks wouldn’t be in business if it weren’t for the communities they serve, so they have a vested interest in seeing those communities flourish. This is why community banks commit to volunteer work in their communities, offer products, programs, and events designed to benefit their neighbors, and invest financial resources in local charitable causes and organizations.
It’s clear that community banks do a lot for their customers and the local neighborhoods they call home. But many people are hesitant to make the switch from a big-name megabank because they fear that community banks can’t compete from a technology standpoint. But, local banks aren’t necessarily constrained by their size. Many offer access to ATMs beyond their physical footprint by being tied into a vast ATM network. BankFive for example is part of the SUM Network of ATMs. Many community banks also offer their customers the latest in Online Banking and Mobile Banking technology. Some banks even offer special services to make changing banks easier than ever. BankFive, for example, offers a service called Switch My Bank, which allows you to change your direct deposit information and update your online and recurring payment methods with just a few clicks.
If you’re interested in making the switch to a community bank, visit https://www.bankfive.com/Our-Difference/Who-We-Are/Community-Banking to learn more about BankFive.