What Do Community Bankers Want? What Do Community Banks Need?

Why It Matters

The findings map the strategic tech gaps and competitive dynamics that will shape community banks’ survival and guide fintechs toward high‑impact collaborations.

Key Takeaways

• Nonbanks up 7% competitive in payment services.
• Cybercrime tops internal risk concerns for community banks.
• Mobile banking seen as biggest five‑year opportunity.
• E‑signatures and remote deposit capture rated highly important.
• Fintechs can aid deposit growth, loan automation, compliance.

Pulse Analysis

Community banks, long the backbone of U.S. credit, now confront a dual‑front battle: entrenched regional rivals and agile fintech newcomers. The CSBS survey highlights that non‑bank entities have lifted their competitiveness in payment services by 7% year‑over‑year, siphoning digitally native customers away from traditional branches. At the same time, deposit‑rate sensitivity has risen, with a quarter of respondents always adjusting pricing to local market shifts. This competitive squeeze is compounded by a surge in cyber‑related losses, prompting banks to allocate a larger slice of compliance budgets to fraud detection and anti‑money‑laundering controls.

Against this backdrop, community banks are prioritizing technology that delivers immediate operational gains. Solutions such as e‑signatures, remote deposit capture, and mobile banking enhancements are classified as “very important,” reflecting a pragmatic focus on customer convenience and cost reduction. Conversely, more speculative offerings—Banking‑as‑Service platforms and deep fintech integrations—receive lukewarm reception, with over half of banks deeming them irrelevant. The five‑year horizon reinforces this trend: mobile banking expansion, integrated loan processing, and cloud‑based core systems dominate strategic roadmaps, while AI‑driven customer interaction tools attract less than half of the interest.

For fintech firms, the survey outlines a clear value proposition. By delivering deposit‑growth tools—personalized savings plans, dynamic rate management, and engagement analytics—vendors can help banks counteract out‑flow pressures. Scalable loan‑origination platforms that embed AI for underwriting efficiency address the demand for faster, more accurate lending. Finally, compliance automation and risk‑management suites can alleviate the rising cost of cyber‑crime defenses. Aligning product development with these concrete needs positions fintechs as indispensable partners in the evolving community‑bank ecosystem, potentially unlocking new revenue streams and fostering long‑term collaboration.