With growing competition from megabanks and big regionals, community FIs need to leverage their ability to attract new retail and commercial customers. 
We hear this all the time and understand the challenges of going up against these Goliaths with just a sling and stone. 
But as in the original story of David and Goliath, it’s also possible for community FIs to take advantage of their historic value drivers with a unique, focused strategy that expands SMB and retail business. 
 
The Current Cha...

The Federal Reserve says check writing has declined almost 75% in the last 25 years. There were more than 4 billion checks written in 2000. Today, that number is around 750 million. 
And recently we’ve started to see both banks and retailers start to cool on accepting these standards of a bygone era. Giant retailer Target announced it’s going to stop taking personal checks at its stores. And megabank JPMorgan Chase has also had some troubles managing checks in as a paper check deposit scam went...

The last fintech wave was decidedly driven, like today’s burst of interest in AI, by the follow-on effects of the new digital age that has altered the entire marketplace in the past 20 years.
We saw it hit retail first. And now it has landed squarely in retail and SMB banking.
While that wave was moving slowly for many years, it still managed to take many community banks and credit unions by surprise. 
One of the biggest attractions of neobanks and digital banks has been their focus on providing...

According to a recent Jack Henry article, the top 25 banks in the US account for 84% of primary banking relationships with SMBs. 
And community and regional FIs’ share of primary SMB banking relationships are declining due to megabanks and digital banks expanding their market share - from 28% in 2018 to 16% in 2022. That’s a 43% drop, and that should be a clear signal that community FIs need to rethink and revitalize their SMB checking products before it’s too late.
The biggest challenge is comm...

Flat Fee Checking Risk and Rewards
And one proven way to do this is using flat fee checking accounts that offer a subscription model with value-added benefits. But changing checking products to a simplified system with flat fee products and possibly a free product and a high-interest one, may mean losing some accounts. 
For example, on average 34% of checking accounts at the typical community FI are non-performing and that has a significant effect on overall performance, especially when new depo...