Community banks see cybersecurity as a top challenge, with customer acquisition and retention a close second, according to a recent survey of community banks by BNY. The survey found that small and medium-sized businesses comprise the bulk of community banks’ customer base, followed by agricultural and rural customers, individuals and households, and nonprofit and civic organizations. Asked about their top challenges, 27% of respondents cited cybersecurity threats, followed by customer acquisition and retention at 26% and data management and analytics at 24%.
Two in five respondents said their banks face challenges in offering competitive loan rates, and over a third would like to better offer high-yield savings or advanced investment options to their customers, according to BNY. “These gaps highlight opportunities for community banks to better meet customer demands through more sophisticated financial tools and digital finance solutions,” it added.
About 40% of respondents plan to prioritize innovation in technology initiatives to help enhance customer satisfaction, with more than a quarter investing in services like instant payments and one in five prioritizing automated loan decision-making and account openings, BNY said. At the same time, 30% of community banks polled plan to prioritize technology for risk mitigation, while slightly less than 30% want to leverage technology to handle regulatory and compliance issues. When asked which emerging digital technology services are “part of your bank’s strategic vision in the next five years,” nearly 40% of respondents cited artificial intelligence and machine learning.
