Community banks are keeping bank branches open, with 84% confirming that they have not closed a single branch in the past month.
According to the State of Community Banking Survey by consulting firm, Wipfli, which questioned 177 community banks in 33 states, in addition to keeping branches open, a large number are also increasing the services they offer to customers.
More than three quarters said they have added wealth advisory services in the past three years, while 56% of banks have added trust services and the same percent have added insurance services.
There was also an interest in cryptocurrency services, with 29% saying they expect to add these services within the next 18 months.
Talent management was the top concern for community banks, with 74% of community banks rating it as a primary concern.
Nearly half said a labor shortage was a major factor in talent management, while 67% said they were “extremely concerned” about employee retention and recruitment.
The digital transformation continues to be a “murky concept” for community banks and is “eroding the foundation of community banks.”
“That murkiness is reflected in the disparate ways community banks define digital transformation,” noted the report.
The survey found that 48% of banks have clear objectives and a path forward to digital transformation, however more than half were less certain about digital transformation.
For community banks to keep up with digital initiatives within the banking industry, full digital branch services will be in demand, along with reliable cybersecurity.
The top four definitions of digital transformation by community banks included payment transactions, faster loan approvals/account opening, virtual branches, and digital financial advisors.
The most important strategies for community banks in 2022 was improving digital customer engagement, followed by talent management, and exploring new revenue streams.
The least important strategy was mergers and acquisitions.
Key risks for banks in 2022 included changing client practices that raise viability risk, supply chains issues, maturing third-party relationships and cybersecurity, regulators changing priorities, as well as interest rates, technology, talent which cover longstanding risk priorities.