Perhaps you don’t know this, but there is no clear definition that you will see on community banking if you check Merriam or Webster’s Dictionary. And while many people are aware of what community banking is and how it differs from the other banks, still, others do not know what it means. Let me share with you the definition of community banking from a community bank employee’s point of view.
In the year 2013, the community bank I’m working on was named the Business of the Year Award for 2012. I felt so honored to be part of the bank receiving recognition, especially since several other banks were also nominated just like us. I was contemplating on what qualities led to the award, and finally, I arrived at some principles that I believe a community bank should symbolize.
- The bank’s reputation is dependent on its profile. A community bank is measured by praises and recommendations from clients and other people from the business community.
- The bank and its employees must know all its clients and the community must know the bank well. Community banks are proud that because they are relatively smaller compared to others, they know their clients’ names and addresses.
- Decisions and agreements regarding loans are geared toward the community. They must be consistent, trustworthy, and fair to everyone concerned. It is a known fact that community banks are not obliged to always approve of loan requests. If the request is denied, the bankers must stand firm with their decision. The loan officer is the responsible person who can approve or deny a loan request, and there is no one else who can do that task but him.
- Employers and employees of the community bank should prioritize their clients first. This means that they must strive to make the clients feel that their relationship does not only exist when the bank wants something from them. Before they make decisions, they must make sure that they have exhausted all efforts for the good of the clients. It is a gratifying feeling for the bank and the client to succeed in their endeavors by helping each other even through the tough times.
- Community banks are not expected to have marketing plans that are equal to or higher than the larger financial institutions. The client base of a community bank does not depend so much on the market campaign but the honesty, strength, and assertiveness of its employees. When a client is introduced and is walked through the guidelines of the community bank, it is the employees’ goal that the client decides to stay for good.
- Employees of the community bank are obliged to take part in community activities and events. The bank cannot donate large sums of money to show its support; the employees almost always work together with local entrepreneurs as well as the local government to find ways in making their community a much better and safer place to live in.
- Community banks know and understand their roles in society. As a long-time employee, people would ask me how banks like ours could compete with the larger national banks. I would always tell them that it’s because we know who we are and what we can offer, and despite having a limited niche compared to the national banks, we are still able to accomplish the goals that are set for us to achieve community-wise. Our clients are living testimonies of this truth.
Overall, just recalling the award that our bank has received, I feel very proud to work in a community bank. It hasn’t always been easy. Of course – because if it was, then I guess all of us could work here!