Commercial Cash Management Opportunities for Community Banks
A backlash against the largest financial institutions is creating a prime opportunity for community banks to attract commercial deposits, according to results from a survey conducted by Abound Resources.
The survey of 55 CEOs at community banks in the US ranging in size from US$100m to US$3bn found that 54% have experienced an increase in fee income from commercial depository services in the last six months and 87% believe they can increase commercial fee income. While community banks see great promise in commercial deposits, the survey finds that there remains untapped potential in commercial cash management for most institutions.
“Many community banks already have the cash management products that most small and mid-size businesses need,” said Sharon Sokol, vice president and cash management expert at Abound Resources. “Many banks just don’t know how to package, market, deliver, and support these products effectively.”
The four primary factors are driving the growth of cash management programmes in community banks: