The Coronavirus crisis has quickly become one of the most significant health and economic catastrophes of our time. Before the pandemic struck, nearly 80 percent of American households were living paycheck to paycheck. Add to that a global pandemic and the financial forecast looks bleak. Are you one of many small business owners who was forced to shut your doors for months on end? If so, you were likely faced with the reality of what your current banking relationship is costing you. In good times, you may not have noticed the expensive fees and overcomplicated systems. Now that your financial security has come into question every penny needs to be accounted for.
As the CEO of a community bank, it pains me to see hard-working small business owners overwhelmed by bad banking practices. By my estimation, most small business owners are overbanked. Meaning, you pay for accounts and services above and beyond what you need to successfully operate your business. This circumstance is most common with customers who have mistakenly bought into the convenience fallacy of the big bank industry.
Many big banks have a branch in seemingly every small town in America, and this is one of the most common justifications we hear from customers who opt to go big. A decade ago that argument might have made sense, but today as community banks are offering the same online resources as their big-bank counterparts and larger ATM networks, convenience is no longer unique to large corporate banks.
Once you’re in the snare of the big bank sales funnel it’s their job to upsell you on products and services that you don’t need. Until one day when a pandemic strikes and you realize you’re paying more for banking than you can afford. Community banking, on the other hand, is built on relationships not sales strategies. When you’re desperate for a loan in the middle of an economic crisis, do you want to bank with a company that sees you as a number on a spreadsheet, or someone who knows you by name?
When PPP loans initially became available, my small community bank was the first in our area to distribute funds to the small business owners who needed them most. The money we dispersed saved the jobs of the people who live and work among us. It matters to me and my colleagues that our small town maintains its vibrancy in the midst of this crisis. Community banking customers come to us because they’re looking for a high quality relationship and that is more valuable today than ever before.
So where does this leave you? If your small business is in jeopardy, it’s time to examine your relationship with your big bank. What services do you actually need, and how can you trim the fat and save your resources? If you’re not already convinced to bank small, I think you will be when you see how much you’re paying for such little benefit.
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