Colossal Concepts

Illustrations: Harry Campbell

Illustrations: Harry Campbell

Four ideas that could influence the future of community banks

By Tim Cook

Every industry thrives on new ideas, big and small. Ideas drive innovation, and they define what’s possible or new, often spawning from a problem or need. But before they become commonly adopted principles, ideas are tested in the marketplace over time. Those that bring results provide new competitive advantages and, at least for some, set new standards for success.

Most community banks have their own set of established ideas, either on paper or in everyday practice. Others are still being explored in the marketplace. New ideas are always surfacing, demanding attention and testing.

What follows are four ideas likely to shape how the most successful community banks prepare for the future. You’ll recognize them all. Some are roughed-out concepts— theoretical solutions to challenges or needs still inadequately addressed. Others are already finding ways into the operations of community banks to one degree or another. All are offered here for consideration, debate and discussion.

Which of these ideas are important, no longer relevant or never were valid? Which important ideas are missing? Tell us online at, or send comments by email to to continue the discussion or guide future Independent Banker coverage.

0615-ColossalConcepts_S01 1. Netting big (and small) data. Data, data everywhere, but not a drop to think. Our businesses as well as our personal lives are swimming, if not drowning, in information. This is certainly no revelation to community bankers. Every operational area at community banks is awash in data. Some of that data can be immensely enlightening and useful, but much of it is distracting or unreliable red herrings. For this reason, less but more meaningful data is sometimes the data gathering and monitoring goal today.

Efficiently using useful data and culling out the rest is becoming a whale of a competitive advantage, but a basic challenge remains in catching the data we need. Community banks now need software and machines to sort and make sense of the data other software and machines are sorting and collecting for them. Much data is readily accessible, but much of it involves dinky bits tangled in disconnected systems. That can make gathering data cumbersome or downright difficult to either collect or organize in a format where it can be fully understood and communicated. And without having the right data, in the right format at the right time, we may not know what we need to know—at least in time to make a difference.

Community banks have remarkable software systems available right now to help assemble, identify and monitor important data from their operations in a timely, increasingly real-time way. These already powerful software systems will not only become increasingly capable and easier to use, they’ll become essential to the success of every community bank’s operations. What we’re collecting now is the tip of the information iceberg of what we can and will put to use in the future.

The big idea here: Of course, information is a core commodity of every community bank’s franchise. Community banks that use their data better and faster than others can’t help but have a competitive advantage—from sales and product development to underwriting, compliance and risk management. It is likely to affect how well community banks—at least relative to their competitors—serve their customers and how efficiently and safely they operate. How well community banks share valuable financial information with their customers, for example, might be an area to review—or to develop as a revenue stream.

Everyone faces a steep learning curve on this issue. Just as critical as having these information gathering systems will be having the talent to use them effectively, including communicating the insights, and to their greatest potential. But while the future of big and small data isn’t clear or assured, it promises remarkably productive change that’s already easily imagined.

0615-ColossalConcepts_S01 2. Retail renovation. What community banker today hasn’t heard a dirge sounded for brick-and-mortar retail offices? There are too many retail bank offices. They’re too big. They’re unprofitable. In today’s digital service age, they’re obsolete warehouses, serving fewer customers and the least profitable ones. There’s some truth for community banks for some of these claims. But so much of that negative analysis relates to the megabank transaction model and fails to account properly for the real-world dynamics of the community bank service model.

Retail offices are likely to remain just as important to community banks as their Internet service channels, but your storefront offices are likely to adapt and become leaner in the future. They might be smaller (though perhaps more posh to get customers to linger longer). They’ll probably be stuffed with more self-service technology. And they’ll likely have fewer staffers but highly capable “universal” bankers who know and do most everything financial or operational.

The big idea here: Where community banks locate their retail offices and how they allow the general public to use their facilities for different purposes might be the next retailing transformation. Like expanding their financial offerings, community banks that stretch the bounds of traditional retail models to turn their branches into multipurpose hubs where more people work, shop, recreate and congregate will create new ways for people to connect with and relate to those community banks.

More in-store branches could be the answer for some community banks, but so could more stores within existing branch buildings. Why not rent retail space next to a dentist’s office, a high-traffic workout gym or even a dog day-care center? Strategically placing a branch within a professional center filled with lawyers or doctors, as well as their clients and patients, could be a smart move for banks looking to generate more trust or wealth-management relationships. Similar to the popular food trucks taking over downtown parks and parking lots during lunchtime, more community bank branches could mount their branches on a chassis and wheels for regularly scheduled rounds of stops and visits at lunchtime locations.

Possibly better yet, more community banks could turn their buildings into meeting places where local civic groups and home-based entrepreneurs can go to conduct their meetings and even where local theatre troupes might hold their performances. Why should freelancers and entrepreneurs only go to Starbucks to find camaraderie while getting their work done?

Future retail strategy isn’t likely to be merely about smaller facility footprints. It’s not likely to be only about replacing people with more technology. Another catalytic ingredient might be required—positioning branches so they make new connections with people. Those connections wouldn’t just bring in new customers, they also would remind people how community banks can be tremendously relevant and integral to their everyday lives. For relationship banks, that’s a competitive edge.

0615-ColossalConcepts_S01 3. Lifelong learning. We’re all becoming universal bankers now. From the customer service line to the boardroom, community bankers are continually challenged to learn more and do more. That’s daunting but exciting, too. The good news is that while we all need to learn something new, we also all have knowledge to share.

For the most successful community banks, encouraging lifelong learning could mean formally fostering internal cross training and knowledge sharing among their staff members. It could also likely mean allowing and encouraging all employees—not just a select, high-potential few—to continually reach outside the organization to develop new skills and new ideas. The growth and sophistication of online courses is opening extraordinary new opportunities for nearly everyone to learn either formally or informally almost anything as their schedule permits.

The big idea here: Done right, in a constructively supportive environment, continually empowering and fortifying employees with new knowledge for expanding work roles will help drive greater competitiveness and innovation. It can also bolster staff morale by providing employees new career opportunities—including roles not yet envisioned—and fresh intellectual challenges. For these reasons, it becomes an advantage for community banks to offer diverse learning opportunities, including those that extend beyond banking and business subjects. How about paying a lender to take a philosophy course to boost his logic and thinking skills? Why not subsidize a marketing person’s art history class?

A work environment that fosters continual learning can boost talent recruitment and retention. Finding room in both budgets and staff schedules for continual on-the-job learning—whether that involves mutual mentoring where employees teach each other new knowledge, skills and jobs, or whether that involves enrolling in outside continuing educational opportunities—will be a vital, revitalizing way for community banks to ensure they will continue to have employees who will know and do increasingly more as required.

0615-ColossalConcepts_S01 4. Millennial madness. Just pop your head out your office and look down the hall; you know these folks. The highly coveted consumer cohort at 80 million strong, millennials have become the most relentlessly and mercilessly scrutinized generation by cooing marketers and their enablers in the media. As perhaps well they should be.

Clinically defined as the men and women who came of age in the Internet and communications boom roughly from 1978 to 1996, these customers and coworkers are now between the ages of 37 and 19. They are already deciding winners and losers in the marketplace, and they will soon, by generational default, be inheriting the top levers of America’s workplaces, including the nation’s community banks. This obsessively mobile generation has the whole world in its hands, and pockets and purses. They should be observed and listened to.

The big idea: Millennials are us, and we are them. After all, who isn’t mobile and technology dependent to one degree or another? Who doesn’t look to new products, technology and inventions for greater convenience, autonomy and choice? Think of drive-throughs, ATMs, credit cards and Internet banking. Millennials only want what ever-improving technology has offered everyone of every generation.

The discussion about and with millennials will and should continue. Don’t become complacent, but don’t panic. Instead, take part. Anticipate, respond, experiment and adapt with new products and technology as you always have before. Stay sharp and in the game. Most of all, persistently promote your community bank’s good story to this generation. You might need to reach out in new ways over different channels.

But take to heart that community banks can and already offer everything millennials want and expect today. Moreover, millennials, possibly facing more complex financial challenges and opportunities than those of any generation, want and need the trustworthy financial resources and help that community banks distinctly provide.

Tim Cook ( is ICBA’s senior vice president of publications.