Fed survey assesses community bank challenges

Northwestern Financial Review, Oct 25, 1997 by Bengston, Tom

Many community banks face the challenge of implementing new technologies and services as well as intense competition from other banks and financial services providers, according to a community banking poll conducted by the Federal Reserve Bank of Minneapolis. The poll of 344 banks with less than $1 SO million in assets was conducted last May. Among the survey's findings: Large bank respondents (banks with $50 million to $150 million in assets) expect more competition from other community banks and other financial service providers than do small banks;

The greater competition facing large community banks is accompanied by more extensive product and service offerings;

Large banks surpass small banks in offering technically advanced products such as ATMs, debit cards and bank-by-phone service;

Common issues confronting community banks are employing technology, deposit growth and credit quality; and

To meet the challenges ahead, more large community banks expect to expand by acquisition than small community banks.