Charles Potts: Set your sights on payments

By Charles Potts, ICBA

In the wake of COVID-19, a payments innovation strategy is vital for community banks to grow and strengthen relationships in the small business marketplace. Every strategy should start with asking why. Why do we want to do this? Why now? It’s critically important to elevate the larger “why” question before parsing it into a detailed strategy.

For many community banks, the implicit “why” is found in their synergistic relationship with the small business community. With more than 60% of small business lending originating at community banks and the overwhelming success of the Paycheck Protection Program (PPP), there’s an even stronger connection between community banks and small businesses. Payments and cash flow are the lifeblood of small businesses and should remain a priority for community banks.

From a tactical perspective, your community bank can benefit from assessing what you’ve put in place over the past year and a half. The lessons you learned and solutions you deployed form a solid foundation for analyzing what worked and how those tools compliment or enhance your overall payments innovation strategy.

It’s equally important to ensure you have the right kind of security, fraud, know your customer (KYC) and anti-money laundering (AML) solutions in place to maintain your relationships with small businesses. An essential tactical component of this planning should include identifying friction points and minimizing or eliminating them in your interactions with small business customers. This could include identifying and offering alternative payments solutions and methodologies to support customers’ needs.


Assessing new opportunities

A two-pronged approach may prove helpful in assessing and analyzing your options. First, look at ways of strengthening and deepening the small business relationships you’ve nurtured out of the PPP. Second, consider expanding into other lines of business. Do your people possess the skills or insights to do so? This exercise may expose opportunities to use your payments innovation strategy and onboard talent to pursue them.

Self-assessment processes and tools can help identify product and service gaps and pave the way for new business prospects. We released the ICBA Bancard Digital Strategy Guide (, which includes assessment tools for creating an effective strategy. ICBA offers resources to support your strategic planning process, including our payments and policies groups, preferred service providers (PSPs), ThinkTECH Accelerator and more.

In 2021, community banks have some of the most sophisticated capabilities and tools available to strengthen and grow small business relationships. Now is the right time to evolve your community bank’s payments innovation strategy.

The pandemic taught us many things. One thing we know for sure is that small businesses want to do business with a banker, not just a bank. If not you, then who?

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