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Community Banks All-In on Technology

CSBS just wrapped up its sixth annual Community Banking Research and Policy Conference, a joint initiative with the Federal Reserve System, and as of this year, the FDIC. Many activities lead up to the conference. Two of note are the national survey of community banks and the community bank case study competition.

The national survey, which is distributed to banks by state bank regulators, collects valuable data on how banks are positioning for the future. The survey is coupled with “Five Questions for Five Bankers,” which is administered by the state regulators. With over 500 banks annually completing the survey and 37 states regulators asking the questions of bankers, the results are insightful about banks planning for the future, their challenges and opportunities. It is a one-of-a-kind look into the industry. 

The case study competition, in its fourth year, has undergraduate students partnering with a community bank to look at a key issue facing the industry. This year, 51 teams participated from 45 academic institutions in 42 states.

The 2018 case study competition focused on community banks’ use of technology. The cases provide valuable insights into how banks are viewing technology in their operations, customer service and retention, new product, and disaster recovery. As you would expect, you get the full range from excitement and renewal to frustration and anxiety. But make no mistake, community banks are all in when it comes to technology.

The national survey asks an important question about the bank’s plan for products and services. The results show a clear drive towards adding anything technology related. See the graphic below. Previous reports consistently showed banks wrestling with the idea of technology solutions, and fintech firms in particular, as “friend or foe.” The industry seems to be well beyond that dilemma and is focusing more on what solutions are best for their bank’s customers.

This is all leading to exciting and interesting changes in staffing, governance and risk assessment. Stay tuned as we explore these topics in future posts.


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