Charles Potts: 3 ways to boost profits by innovating

By Charles Potts, ICBA

Profitability and performance have always been a major focus for community bankers. And in the wake of COVID-19, new sources of income are becoming critically important. Several factors contribute to a bank’s profitability—such as the quality of core deposits and the right balance of loans to overall assets—but one often overlooked factor is the connection between innovation and profitability.

To that end, consider these three areas when looking for ways to increase innovation and improve profitability at your community bank.


1. Ease employee turnover

With U.S. job openings at an all-time high and many organizations short-staffed due to the pandemic, it’s more critical than ever to reduce employee turnover. Today’s workers are looking for innovative cultures that provide them with opportunities to contribute to the overall direction and strategy of the bank.

A community bank’s employees are often best suited to identify critical areas of improvement, resulting in more efficient, cost-effective and profitable bank operations. By cultivating an innovative culture, the contributions of longer-tenured employees will continue to grow, which, by extension, results in reduced turnover, improved operations and increased profitability.


2. Embrace innovative technology

There are numerous solutions and services available to community bankers to increase efficiencies. Instead of raising your headcount, consider instead whether a new technology solution could provide incremental improvement in the overall efficiency and effectiveness of bank operations. A natural extension of what innovation brings to a bank is improvement in performance and profitability.


3. Stay competitive

Sometimes, the key to profitability is making sure you’re providing the right products, services and solutions to your market at the right time. A thoughtful, forward-looking culture naturally fosters new ideas and solutions that work. Continuous innovation tends to support short- and long-term profitability, because the bank won’t experience the detrimental peaks and valleys that come with significant upheavals or conversions.

The fast-fail methodology, popularized in Eric Ries’ book The Lean Start-Up, is also something to consider. By iterating and testing faster, community banks are better able to jettison bad ideas sooner. Coupling an innovative culture with innovative processes that mimic the fast-fail methodology can help accelerate the cycle of innovation and more quickly meet your business goals and objectives.

ICBA remains committed to bringing meaningful innovation to community banks through its vast network of resources, including the ThinkTECH Accelerator, which provides opportunities to interact with vetted fintech providers and other bankers. Most recently, ICBA launched a series of educational initiatives through Community Banker University in partnership with The Venture Center. We invite you to check out these and other resources at

Charles Potts ( is ICBA’s senior vice president and chief innovation officer