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MarketsandMarkets: Strategies and Best Practices of U.S. Community Banks
The U.S. currently has more than 6,000 community banks with over 50,000 branch locations across the nation. ‘Strategies and Best Practices of U.S. Community Banks’ is a market research study designed specifically to identify the current and the future role of community banks in the U.S. financial market. The report focuses on identifying the new opportunities in the community banking sector as well as the growth strategies of the key community banks.
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Community banks have seen their share of deposits dwindle from 33% in 1992 to 12.4% in 2009. However, the economic recession proved to be a boon for community banks, as customers lost faith in large financial institutions. The ‘too big to fail’ theory has failed, and so consumers are moving their deposits back to community banks. It is the right time for community banks to capitalize on this shift and put the right programs in place to accelerate their success.
In the current phase of economic recovery, community banks are seeking alternatives that are cost effective and faster to implement. Internet banking, mobile banking, and remote deposit capture services play an important role in enabling community banks to better serve their customers and reach their target segment 24/7. The loss of trust and confidence in big banks, and the changed perception of U.S. consumers, are the major factors driving the growth of community banks in the U.S.
- Community banks are primarily targeting small businesses, as this profitable segment offers a high ROE of 35%.
- Community banks are introducing stronger credit risk management systems and are also hiring experienced persons to overcome their lack of infrastructure and experience required to deal in commercial and industrial (small business) loans.
- Use of business intelligence/analytics tools to distinguish between profitable and non-profitable consumer segments will help community banks compete effectively with large banks.
- Community banks are bundling their products and services to cross-sell and up-sell products and services to small businesses.
Scope of the report
Strategy Formulation: The goal of this section is to provide a schematic of the marketplace we are studying so that report users can determine their competitiveness and positioning in the market. Through our deep understanding of the financial services industry we will size the market, identify the trends and drivers, and develop the right framework for strategy formulation that will help report users measure their share and develop strategies to sustain or improve their market position.
Business Model: The goal of this section is to identify the business models that already exist. FIs know that although the model exists it might not work for them because of a variety of factors. A new market may look enticing but if they cannot optimize the business model they are bound to fail. Each report carefully studies the business models already in the market. The bottom line is we help FIs understand how to make money.
Vendor Selection: The goal of this section is to profile companies supporting the market we are studying. The choices can be overwhelming. We profile the top vendors and get the perspective of other users to help you make the best decision for your financial institution. Every report includes in depth reviews of the top vendors.
MarketsandMarkets (M&M) is a global market research and consulting company based in the U.S. We publish strategic advisory reports and serve as a business intelligence partner to Fortune 500 companies across the world. MarketsandMarkets also provides multi-client reports, company profiles, databases, and custom research services.
M&M Banking and Financial Services practice recognizes the challenges that financial institutions face bringing the right products to market. Our reports and consulting practice provide a unique perspective allowing the financial institution to see and experience the best way to achieve their product goals. Through a mix of case studies, primary research, and business modeling we provide a 360° view to identify how you can create, capture, and keep the value of your product and out think the competition.