3 Techs That Successful Community Banks Are Investing In


Key investments focused on talent & retention, fintech and enterprise risk management

Investing in technology isn’t just about updates and upgrades. It’s about strategy and knowing how technology investments will propel a community bank towards its goals—resulting in a bank that’s strongly aligned with its mission and vision.

While strategic success looks a little different for every community bank, there are three key areas where savvy community banks are making technology investments today.

  1. Talent Attraction and Retention

Everyone is tired of talking about The Great Resignation, but it’s still going strong. Community banks know it too. Nearly half of community banks (48 percent) say attracting and retaining talent is one of their top three business challenges in 2022.

Community banks can’t afford to pay top dollar for talent, so they are looking for other ways to create an alluring work environment. Customers are used to banking digitally, and workers have the same expectations. Digitizing and automating business processes and communication not only makes a bank more efficient, but it also sends a message to potential employees that they’ll be working for a modern organization—one where there is less busy work and more time to make significant contributions.

Culture is also an important differentiator. Investing in tools (such as a company intranet) that help connect employees create a more appealing workplace.

  1. Fintech Partnerships

Whether it’s as a customer or as a partner that provides financial services, community banks are embracing relationships with fintechs. The most successful ones are doing it with their wide eyes open. They take the time to understand how the partnership aligns with its strategy, assess the potential risks and monitor the relationship to ensure it remains in the best interest of the bank. It’s easy to get caught up in the excitement of a new venture, but due diligence is critical.

  1. Enterprise Risk Management (ERM)

Strong risk management has always been a best practice, but now that examiners are beginning to ask more about it, community bankers are taking note. Operational risk, cyber risk, credit risk and compliance risk are all hot button issues. Community bankers also report that examiners expect to see risk assessments justifying strategic decisions, especially when it comes to fintech partnerships.

Risk management is all about resiliency. As EY notes in its report, “How resiliency in risk management is the new top priority for banks, banks are operating in an environment of ongoing change and disruption. Being able to quickly adapt to change is becoming necessary to survival.

Investing in resources to help identify, assess, measure and mitigate the risks of cyber events, fintech partnerships, other critical third-party relationships, business continuity and compliance, and then put the pieces together to help make big picture decisions is essential to building an institution that can handle downturns and other shocks.

As community banks look beyond the basics of technology investments, they are now assessing the potential for new technologies to push themselves in the right strategic direction. However, when assessing technologies, banks must consider how they can take advantage of future opportunities while balancing future risks and challenges. There is tremendous opportunity ahead, but risk management will be critical.

About Author:
Michael Berman is CEO of Ncontracts, a provider of integrated risk management solutions for the financial services industry. www.Ncontracts.com.