Make the Shift to a Local Bank
May 31, 2017 at midnight
When looking for a new banking institution to work with, we should never presume that a large corporate bank is our best bet. Although large commercial banks might boast a strong presence in most areas, community banks are giving them a run for their money today. Local banking institutions are celebrated for offering competitive rates on loans and savings accounts, as well as for their relatively superior services.
Local vs. Corporate
Corporate banks with national interests must meet strict regulations that govern their inter-state banking operations. Their main focus is on providing substantial income for their owners and shareholders. The global financial crisis of 10 years ago cast big, commercial banks in a negative light. Conversely, it brought about a positive outlook for local/community banks. Of course, both corporate and community banks offer the same essential services. In certain areas, however, there are profound differences.
Individuals and businesses established in smaller cities or towns tend to prefer local banks, which are run by local community members and are well known by everyone. Inevitably, local banks are also able to offer greater convenience and face-to-face efficiency. They often charge lower fees than larger banks, as well.
- Personalized Customer Service
Personal customer service is rare in large, corporate financial institutions. Community banks, on the other hand, tend to offer excellent customer service. Typically, members of the community sit on the board of directors and act with their community’s or area‘s best interests at heart. In contrast, large banks tend to be more rigid regarding discussing mortgages, overdrafts, loan fees and more. In addition, most large banking institutions have cut back on offering their clients access to bank tellers for standard transactions like deposits and withdrawals.
- Rates of Deposit
Compared to corporate banks, local banks are likely to offer interest checking accounts, certificates of deposit, and higher rates on savings. They are also more likely to offer incentive checking accounts that earn interest.
- ￼￼￼￼Services for Local Businesses
The main lenders to small businesses and farmers are local banks. In fact, this customer-bank relationship has been around since the beginning of banking. Essentially, many local banks see themselves as small businesses, which is why they are more understanding of the needs of local businesses and individuals who live in areas where small businesses and farms thrive. Since community banks are usually based in marketplaces, they have an intimate knowledge of their community’s opportunities and challenges. They do not gamble; rather, they aim to support productive investment.
Local banks also give back to their communities by sponsoring organizations, events, health and human services, education, culture and arts, civic activities, and more. In addition, they can help keep a community unique and give it its flavor.
Working with a locally owned and operated business could be one of the smartest business decisions one could ever make. Locally owned businesses care about their customers and always have time for them. They take the time to ensure their customers get everything they expect and more, and when something goes wrong, customers simply need to contact a representative. Essentially, when working with a locally owned and operated business, one will actually deal with a real person.