Three payment trends give an edge to community financial institutions

first_imgIn the space of a few weeks the world was turned upside down for most people as a result of the coronavirus pandemic. Even as the U.S. tentatively begins to emerge from the lockdown, many challenges lie ahead as the economic impact becomes more fully felt. Much is unknown. However, one thing is certain: community financial institutions must continue to be the banking alternative that consistently delivers the financial support that consumers and small businesses need now and in the face of an uncertain future.The Wall Street Journal pointed out how the country’s smallest institutions were the ones that got the job done in the first round of Paycheck Protection Program, while the megabanks stumbled. Thousands of small business owners voiced their anger on social media after being denied or ignored by the big banks. In fact several of the biggest are being sued by businesses over how their PPP applications were handled.Bank of America stated early on that it would only offer relief to customers that had an existing credit card or lending relationship with the bank. While it later reversed its decision, in our view the initial policy demonstrates the connection large institutions draw between payments and the lending side of their business —in other words, these decisions are transactional for them.Community financial institutions on the other hand leverage payments to support consumers’ and businesses’ immediate financial needs while building long-term relationships with them. Community institutions’ payments portfolios are a powerful means of maintaining regular interaction with and support for members and customers. This gives the institutions an opportunity to demonstrate their strengths compared with the giants. ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr continue reading »last_img

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