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Community banks benefit from larger rivals’ over-reliance on tech

Large banks have spent billions on IT to efficiently process standardized products, leaving an opening for local lenders that offer a banker to talk to.


Most senior bankers agree that this year’s awful events have underlined the urgency of fully embracing digital banking, as their own staff and those of their business customers continue to work from home and consumers turn away from cash.

But are they missing something?

Prioritizing high-tech over the human touch risks turning banks into mere transaction platforms and threatens to remove the one true advantage that distinguishes them from technology companies.

Edward Barry Capital Bank 400.jpg
Edward Barry, Capital Bank

Businesses, especially now, need bankers that can take the time to understand their individual circumstances and problems, offer appropriate financial expertise and advice, and then provide customized rather than standardized solutions.

Take, for example, dealing with applications from US companies for the Small Business Administration paycheck protection program (PPP). The country’s largest banks and medium-sized banks saw this as an IT challenge of designing systems that could absorb tens of thousands of applications from small and medium-sized enterprises (SMEs).

They are proud of the tech and no doubt some of it was pretty good. It had to be. Chase received 75,000 applications in the first hour the PPP was open.


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