Three Principles to Drive Community Bank Innovation

By Charles E. Potts 

For $200 million-asset First Community Bank and Trust in Beecher, Ill., having an innovation mindset means being open to explore new ways to solve for business challenges and opportunities. As the bank’s President and CEO Greg Ohlendorf put it: “What makes a community bank innovative or what puts them in that direction is a willingness to do things beyond the tried and true.

The bank has focused on relationships with fintechs to put their resources to work in new ways. In fact, Ohlendorf and his Chief Information Officer Karen Burgess summed up their innovation philosophy with three key principles.   

  1. Leverage accelerators that feature fintechs geared for community banks. First Community Bank and Trust has focused in on those accelerator programs that feature fintechs specifically seeking to serve community banks, and ultimately, has partnered with eight fintechs who rose out of these community bank-centric programs.  

    For $200 million-asset First Community Bank and Trust in Beecher, Ill., having an innovation mindset means being open to explore new ways to solve for business challenges and opportunities. As the bank’s President and CEO Greg Ohlendorf put it: “What makes a community bank innovative or what puts them in that direction is a willingness to do things beyond the tried and true.

    The bank has focused on relationships with fintechs to put their resources to work in new ways. In fact, Ohlendorf and his Chief Information Officer Karen Burgess summed up their innovation philosophy with three key principles.   

    Leverage accelerators that feature fintechs geared for community banks. First Community Bank and Trust has focused in on those accelerator programs that feature fintechs specifically seeking to serve community banks, and ultimately, has partnered with eight fintechs who rose out of these community bank-centric programs.

    Learn more about ICBA ThinkTECH Accelerator and find out how you can sign up to meet the 2022 cohort and be part of creating fintech solutions for the future.

    “We don’t have time to research to find the perfect solution out of the thousands of fintechs that are out there,” explains Burgess. “These smart people have already figured out which are good fits for community banks.

    In truth, community bank accelerators—like ICBA’s ThinkTECH Accelerator—help community banks save precious manhours by sorting through viable solutions thereby allowing community banks to focus on fintechs that can help them better serve their customers.

    “Last year was the first time I was part of the Accelerator selection process,” says  Bob Fisher, president and CEO of Tioga State Bank in Spencer, N.Y., and ICBA chairman. “ICBA has done the leg work and devoted significant time and resources to identify community bank-appropriate solutions, which may enable our members to grow their banks and better serve their customers. Not every solution will be relevant to every bank, but most will find one or two that are addressing their pain points.

  2. Employ a thoughtful partnership strategy. As First Community Bank and Trust sees it, fintechs can be the great equalizer of the banking world, allowing community banks to excel by offering competitive and innovative services to their customers. 

  3. But in today’s landscape, a community bank’s fintech engagement strategy also must be nimble. So, when First Community Bank and Trust enters into an agreement, they make sure they have terms that allow them to pivot as needed to meet changing customer needs or to institute other relevant technologies as they emerge.

    “We’ve executed contracts that are fair, but we’ve de-risked them,” Ohlendorf says. “Some of them have one-year contracts with milestones that have to be met. If they don’t meet the objective, we don’t have to stay. We don’t have long-term commitments, and the fintechs understand that. They know if they do a good job we’ll happily remain customers.” 

  4. Combine the high-tech with the high touch. One of the biggest calling cards for community banks is stellar customer service. Balancing this level of customer support and technological innovation can be a tightrope walk—one that First Community Bank and Trust walks with pride. 

    “A healthy dose of technology is important as an enabler but has to be bolstered by high-quality support and employee training,” says Ohlendorf. “So, it’s the blending of what we’ve traditionally done well: having a very high-quality customer experience but utilizing technology to help us stay relevant.

    As new customer Jill Piunti, president of MarketPro, a commercial and residential real estate property management and consulting firm attested, that approach works for her business. “First Community Bank and Trust’s customer service is what sold me. But when it comes to technology, they are ahead of most big banks. They know their audience and make it easy for busy small business owners like me to bank with them.

Clearly, community bank teams make an investment in their innovation strategies—from scoping out accelerator programs to setting up profitable partnerships to educating internal teams and external customers about product offerings. But that hard work pays off in having solutions that not only meet, but exceed, customer expectations.  

Charles E. Potts is ICBA senior vice president and chief innovation officer.