Top Insights from BNY's 2024 Voice of Community Banks Survey

We conducted a survey of community banks across the country in collaboration with the Harris Poll. Here’s a look at what they told us, from how they’re seen within their communities to what they need to stay competitive today and into the future.

Communities thrive when homes are built, small businesses open and local programs receive funding. For this to happen, members of the community often turn to their local banks to help them realize these ambitions.

Picture a poignant scene from the 1946 film “It’s a Wonderful Life,” when George Baily shares that he wants to do something “big and important” with his life. His father, who manages the town bank, references the bank’s purpose in response by saying: “We are doing something important. Satisfying a fundamental urge ... for a man to want his own roof and walls and fireplace, and we're helping him get those things.”

This message still resonates today, with community banks providing the bulk of loans, payment options and other financial services to businesses and private citizens. At BNY, we see community banks as integral to advancing an inclusive economy.

That’s why we partnered with the global market research firm Harris Poll to hear from community banks about how they see themselves today — and their needs and aspirations for the future.

The results are now in, and we sat down with Shofiur Razzaque, Head of Community Banking & Solutions at BNY, to discuss what we learned.

1. Can you start by telling us about BNY’s Community Banking & Solutions group, as well as your role on the team? 

At BNY, we serve community banks across the country through at least one of our services and, as part of my role, we want to expand these relationships. We’re thinking: How do we take our platform solutions and deliver the ones that will be the most impactful to our community bank clients?

2. You’ve worked in this space at other companies. What inspired you to join BNY earlier this year?

I’ve held myriad financial roles throughout my career, from branch manager at a local bank to leading operations, solutions and global transformation at a large company.

But it was my first job as a bank teller that shaped who I am. In one day I’d speak with a retiree living off Social Security, a business owner just getting up and running, an affluent client and everyone in between. Through these conversations, I learned about the different financial needs people have across all walks and stages of life, whether it’s to start a business, pay off debt, buy that dream house … the list goes on. I realized that one way I could make a positive impact is to help banks remain resilient for these clients.

At BNY, a firm that touches one fifth of the world’s investable assets, I saw an opportunity to extend these efforts. BNY’s approach to building resilience resonated with me.

Since joining, I’ve helped us embark on a “Voice of Community Banks” initiative. This survey, which we conducted this past spring by polling banks in states across the country is a major component of this initiative.

We wanted to ask questions like: How do they see themselves? What challenges keep them up at night? What do they believe are their greatest strengths? What would really move the needle to help them best support their communities?

3. What survey results resonated the most for you?

The data revealed specific areas where these banks are looking to better meet evolving customer demands for security, convenience and speed, such as competitive loan rates and advanced investment options. We also found that, among the banks surveyed that are looking to expand their capabilities, 96% showed an interest in partnering for treasury services, such as real-time payments. It can be costly and often inefficient for community banks to build these kinds of solutions themselves.

On the technology front, one in three banks expressed an interest in innovative technology services, such as instant payments, to maintain a competitive edge. They also want to leverage technology more for risk mitigation, as well as regulatory and compliance needs.

Also, in answer to “what word best describes how you are seen within your community,” trusted and innovative were the top choices. When I saw this, I was ecstatic — these words convey how BNY strives to be seen by our clients, so it’s fitting that community banks identify with these same attributes.

4. What do you see as community banks’ greatest strengths?

From my perspective, relationship management and personalized service are ways in which community banks really shine. They form meaningful connections with their customers and are essential lending partners for small businesses that need credit.

Keeping these strengths in mind, we wanted to explore how confident community banks feel in addressing future challenges to keep maintaining a high level of personalized service. One survey takeaway in this regard: Over 90% of the banks polled felt well-positioned to initiate digital transformations, which entails implementing such emerging technologies as e-signatures and mobile wallets. However, only about half consider their data analytics capabilities advanced enough to launch a digital transformation program successfully.

They’re optimistic about advancing technologically, but need more expertise in this area. So it made sense to us that they also reported an interest in collaborations as a possible solution: One in five banks surveyed would consider partnering with fintech companies for needed tech capabilities.

5. How has BNY recently collaborated with organizations on interesting community banking initiatives?

We regularly work with other financial services firms, government agencies and nonprofits to help community banks. Take the U.S. Department of Treasury Financial Agent Mentor-Protégé Program, which helps community banks put in bids for treasury RFPs. This is something small banks typically aren’t able to participate in due to size and scale constraints.

Another way we’re helping support these banks is through the Advancing Communities Together (ACT) Deposit Program, which helps spur funding in community banks from institutional investors. It was developed in collaboration with the IntraFi network of banks and launched on BNY’s Liquidity Direct platform.

And just this year we provided a grant to the Economic Opportunity Coalition, a public-private partnership with the federal government to help attract deposits to community banks.

6. If there’s one main takeaway from this survey, what would it be?

Nearly half of the respondents believe they are recognized within their communities for their innovative approaches to helping clients, but nearly a quarter believe they are also perceived as constrained.

This reaffirms the crucial role community banks play in advancing our economy, and the important role BNY and other institutions have in helping equip them with the tools that can help them achieve their ambitions. 

There is more to learn about our survey, so check out our press release and white paper too: The 2024 BNY Voice of Community Banks Survey .