The Community Bank: Betting that 'small' is a plus
The Community Bank – with headquarters in Brockton – has emerged from a series of strategic sessions with a “small is powerful” game plan. CEO David Curtis and his management team will try to avoid direct confrontations with bigger and more powerful competitors. Instead, they are creating a boutique approach to banking.
This approach emphasizes three strategies:
• Avoid spending lots of money constructing new branches. Instead, open up less expensive and more intimate “business resource centers” that focus on the increasingly lucrative commercial customer. Even at its new Lakeville location, which looks like a traditional branch, customers walk into an open floor plan speckled with desks and are immediately greeted by a bank representative. “If a customer only wants to make a deposit or cash a check, we still want to connect with them and learn what more about we can do,” explained Curtis.
• Hire key managers with strong backgrounds working directly with customers outside the traditional banking business. One of Curtis’ most recent hires, Shafeena Rahman, had no prior banking industry experience; yet, she is now leading The Community Bank’s marketing efforts focusing on women in business, including creation of a women’s networking forum.
• Take the bank to the customer – literally. That’s exactly what Mardi Skoegard – who comes from Seattle and the mortgage brokerage business – is doing at the bank’s first business resource center. Her Falmouth location looks and feels more like an insurance agency. Customers can conduct a full array of banking services, but the operation was designed especially for the increasingly coveted commercial client, said Curtis. More to the point, he expects his bankers to spend as little time as possible in the office.
“Clients are so pressed for time; they don’t operate on a standard 8 a.m. to 5 p.m. schedule. If we are to distinguish ourselves, we must provide utmost convenience. It’s a grassroots strategy that translates into old-fashioned house calls, or in this case, business calls.”
The Community Bank has initiated courier service to complement remote capture checking for business clients. “Remote capture is highly compatible with our courier service,” he said. “A lot of businesses are very much check-based. But other businesses have fairly high levels of cash transactions. You can’t scan dollars through a machine. We can mix and match the two services.”
The Community Bank is among a number of banks that have acquired insurance companies to diversify their business model. But, unlike TD Banknorth and Eastern banks, which have merged their acquisitions under the umbrella brand, The Community Bank has carefully preserved McCormick & Sons Insurance Agency’s identity.
“People have grown up with that brand,” explained Curtis, who has a background in marketing. “It’s not necessary to take away its identity. We wanted to have the insurance agency to further expand the relationship potential for the client; make it more convenient for them. Insurance is one of those necessary things businesses have to have, even if they don’t want it. Why should they have talk to us about borrowing money and then go elsewhere to insure what they have done with us? We can provide that opportunity to secure it here. We will take the insurance agency to their business.”
Curtis believes traditional bank branches may be a thing of the past. For one, Internet banking and ATMs are meeting more and more needs of customers. Secondly, a business resource center costs much less than a branch building – and actually serves the increasingly important commercial customer better.
“Branches get expensive. You have to lay out significant capital to build a new revenue stream. If demand for our services in Falmouth grows as we hope, we can expand [our business resource center] in the future, and we will have paid for the additional physical infrastructure with cash.”
Commercial lending now represents between 35 percent and 40 percent of The Community Bank’s business; five years ago, it was no more than 8 percent, said Curtis. The bank works with tiny startups to companies with more than $10 million in annual revenue, but it focuses on the smaller players.
These clients frequently need more than capital, he emphasized. “They need professional advice on everything from budgeting and cash flow to marketing. The growing question is: ‘Does your bank contribute such expertise?’”
A subset of this strategy: Directly appealing to women in business. He has hired one executive to develop a networking group exclusively for women owners and managers.
Curtis acknowledges that if his innovations prove successful, bigger competitors probably will adopt them – sooner rather than later. Competition demands that smaller players constantly innovate. “Inevitably, technology is going to make traditional branches obsolete anyway.”
Published in Cape Business May/June 2007
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