Many community banks have faced their toughest challenges recently. Now, just when it seems like the worst is over, comes a new set of challenges that are different — but just as difficult — as what bankers just went through. The most serious threat comes from the big banks bailed out by the Troubled Asset Relief Program. These mega-banks are putting extreme pressure on community banks to compete for loans, which further reduces margins. If that is not bad enough, the financial regulatory reforms passed this year will require even small banks to implement and monitor some 274 new regulations, a daunting task that certainly will increase costs.
As the economy emerges from the recession, it’s time for community banks to be more aggressive about growth and competition. If you haven’t already started to reassess the way you do business, do it now. Take a hard, unvarnished look at your bank’s strengths and weakness, loan volume, deposits and overall balance sheet. But you also should consider your competition, your client base and your position in the marketplace.
Find Out What Your Clients Really Think
Don’t assume that you know what is really important to your banking clients. How your bank is perceived by the people it serves can be eye-opening.
Listen to Your Employees
Every employee from the C-level suites to the reception desk probably has ideas about how you could do things better, faster or more efficiently. Not everyone, however, is comfortable voicing their opinions. An online survey allows employees to answer questions thoughtfully and anonymously without any fear of repercussion.
Differentiate Yourself From the Competition
Based on real feedback from clients and employees, explore what sets your firm apart from the community bank down the street and how you can build on that difference. Big banks may offer lower interest rates or more services, but some clients may prefer to support local businesses over national banking chains. Whatever it is that distinguishes your bank — as long as it’s authentic and the promise is met — should be promoted in every way possible.
Expand Your Services in Meaningful Ways
If you can’t come up with a compelling reason that clients should choose your bank over the rest, then you need to create one. There may be new products you can offer that will entice new clients or retain your current ones. Whatever you do, remember it is not good enough to simply create new services, but to actually execute on delivering those services.
Stay In Close Touch With Clients
There is a lot of money chasing after good quality borrowers these days. If you want to stay top of mind with your most-valued clients when they need a loan, it pays to keep in touch. Relationships are more important than ever in hard times.
If you want to position yourself to not only survive, but thrive in the next several years, you must commit the time and resources to rethink your business approach and create a viable solution that works for your bank. If you don’t prepare now, you’re going to lose ground at best. If you do, you’ll come out better on the other end and be well positioned for the recovery.
To view the complete article on Helping Your Bank Survive a Tough Economy visit Banknews.