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Community Banks vs. Big Banks: Why You Should Consider Banking Locally

Today, there are more banking options than ever for customers. For most consumers and local businesses, a local community bank or credit union is still the best option when it comes to banking. This article will look at community banks vs. big banks and highlight how community banks and credit unions benefit individuals and local businesses in five ways:

1.    Personalized attention to customers

Community banks are recognized for knowing their community and the customers they serve. They value customers as individuals, often greeting them by name and asking about their families and personal lives. They factor in what they know about your character and personal qualifications into loan decisions and offer customized financial services. Additionally, employees at community banks form deeper relationships with their customers, leading to higher quality service and flexible decision-making.

2.    Customized financial products

Many local banks offer unique programs tailored to the needs of their local customer base. By serving a smaller region, local banks can customize their services and products to match the needs of their specific community. Suppose a community sees a growing population of young homeowners. In that case, the local bank might provide home loans to first-time buyers at a better rate than the big banks.

3.    Direct engagement of the highest-level staff

As community members, community banks are held to a higher standard than national chains. They know their bank’s policies and employees’ behavior directly affect the local community. These banking policies are made by the people who live in the community and know what’s best for the community. For example, while local branch managers of big banks might be working in the community, they typically don’t live there. Community bank CEOs and other top staff work and live in the community. Hence, community banks are fully invested in the local community from the highest-level staff and down the ladder.

4.    Faster loan decisions for local businesses

Community banks and credit unions use their intimate knowledge of the area to make loan decisions. Their insight into local market conditions can lead to approval of small business loans that a national bank may not value. Local banks and credit unions make their decisions in-house and can make faster loan decisions. Community banks often work as a team as they partner with collaborative credit lending to offer loans to more small businesses.

5.    Promote local economy and connections

When you bank locally, your community bank channels your money back into the community through salaries, investments, capital improvements, and discounted services. Local banks often give back with charitable donations to local organizations. Additionally, most community banks invest in small businesses, growing the local economy, and supporting local causes. They also help local businesses connect with local suppliers, service providers, and potential clients. These contacts fuel the local economy and grow small businesses. Local banks can also bring the community together by sponsoring charity events, providing community-based financial education, and organizing fun-filled events.


A community bank is owned and operated by members of the community it serves. Therefore, community banks have a deeper understanding of their customer’s financial needs and provide a more personalized banking experience than their multinational counterparts. Despite the rising competition from big banks and new fintech companies, community banks have continued to serve local individuals and businesses by providing personalized service, flexible loan terms, and lower fees. A Community bank’s success is tied to the local economy’s health. When you bank local, you’re helping your neighbors and local businesses thrive.

Key Takeaways

  • Personalized attention to the customers
  • Customized financial products
  • Direct engagement of the highest-level staff
  • Faster loan decisions for local businesses
  • Promote local economy and connections