Superior digital experience can position community banks as leaders in lending.

Part of our series on financial services, Keith Floen, Chief Marketing Officer of Corserv explains how investing in digital can transform community banks into leaders in lending. According to Floen, a combination of smart and flexible backend automation and sensitive, customer-centric design (on mobile and on desktop) can give smaller banks the edge over larger competitors and flashy startups.

Key takeaway: Conventional wisdom says bigger players will drive digital transformation in financial services, while smaller players will struggle to keep up. The truth is, there’s nothing stopping community banks from making a big impact by investing in improved digital experiences now and surpassing their larger competitors.  

Community Banks Are Falling Behind in Key Ways 

Community banks are lagging behind larger competitors in delivering cutting-edge digital experiences. But developing a strong, intuitive interface for customers is only part of the problem. 

Larger financial institutions are driving digital transformation by automating and digitizing the lending process itself, including applications, background checks, and underwriting. Many community banks still rely on manual and paper processes to manage lending decisions.

As Floen puts it, “community banks are not leading the market – they’re following. Meanwhile, the new Fintech companies out there are competing with the community banks and they provide end-to-end solutions.”

Though the user interface is key, it isn’t the whole story. Excellent digital delivery requires more than an attractive front-end – it requires an efficient pipeline. Large institutions are leveraging digital tools to deliver faster and more efficient lending decisions and to provide more complex products like credit card services. This new, low-friction backend integrates with a well-designed UI to deliver a seamless consumer journey.  

Fintech Companies Are Delivering Integrated Experiences

Fintech stars like Betterment and SoFi offer consumers total integration right out of the box. Community banks should take notice — they’re here to eat your lunch. Fintech startups know that most consumers are ready to ditch their banks for speed, convenience, and superior digital experience. 

But Fintech companies can’t match community banks on in-person service and comprehensive offerings. Community banks can improve customer retention by investing in quality digital experiences to match their in-person delivery. 

Innovation in Community Banking 

Community banking can benefit significantly from digital innovation, and we already have examples of community banks becoming leaders in digital innovation. Corserv collaborated with Pinnacle Bank of Nevada to implement a digital lending experience and modern, digital-first customer experience. Pinnacle has seen significant growth from the transformation. 

The founding team at Corserv realized that for financial institutions below a certain size, the regulatory burden was making providing credit cards unprofitable. To address this, Corserv built a custom system that automates compliance to deliver credit card products at a reduced cost.

Floen explains: “We looked at what the barriers were for smaller banks to get into the credit card space. Because of regulations, complexity, digital requirements, etc., many banks said the hurdle was too great. It’s a three to five year investment before they see their first dollar. We said that’s just not acceptable. So we redesigned the system from scratch.”

To make it more broadly applicable, Corserv rebuilt the system as a full credit-card service geared toward smaller financial institutions. Corserv’s system automates data management and even shares in the risk.

With the right partners, community banks can compete against Fintech startups on digital experience and against larger institutions on credit card lending —all with the added benefit of a human touch and excellent in-person service. 


Author Cooper Pickett

Cooper is the CEO and a co-founder of L&T Co. He is a partner of Columbia Entrepreneurship at the Columbia Startup Lab and a 2010 graduate of Columbia University (CC’10). At L&T, he oversees a growing international team that works around the clock to get clients results. He has extensive leadership and team-building experience from his time as the CMO of a real estate startup. He excels as a marketer and strategist — qualities he refined and developed as the founder of e-commerce businesses in the sports and subscription spaces. With the founding of L&T, Cooper brings these strategies and insights to companies worldwide. He participates in Princeton University’s Employer in Residence program, serves on the Columbia Startup Lab’s leadership committee, and speaks on industry panels about entrepreneurship, marketing, and startups. On occasion, he teaches web marketing at General Assembly.

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