Powering Purpose for Community Financial Institutions
Supporting Black Banks & Their Positive Impact on Communities of Color
The Need to Serve Underbanked Households is on the Rise
Banks Expand Family Banking Offerings
Scaling for Strength Through M&A with Al Dominick of Cornerstone Advisors
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While the share of unbanked households in the U.S. dropped to a record low in 2024, one out of three Black...
With features embedded directly in accounts, parents can more easily prioritize financial literacy and money management skills for their kids With...
In this special guest episode of the Believe in Banking podcast, Gina and Juliet welcome Al Dominick, Partner with Cornerstone Advisors,...
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Sharing Successes
While the share of unbanked households in the U.S. dropped to a record low in 2024, one out of three Black households remain unbanked, according to the FDIC. This data spotlights persistent racial disparities in the banking system, where Black households are “more than five times as likely to be unbanked and more than twice as likely to be underbanked, compared to white households,” as outlined by Banking Dive. The most likely racial group to face such steep barriers to banking, Black Americans experience a disproportionate impact on economic opportunities available to them and their communities.
To address a racial gap in financial services, Black banks were formed, and their numbers were on the rise through the mid-1970s, when 50 such institutions could be found across the country. Today, that number stands at 23 Black-owned and run banks and savings institutions. “If we make the assumption that Black owned banks are more likely to provide credit on reasonable terms to Black clients, then their absence is really important in the context of a situation in which black people are confronted with discrimination in credit markets,” says William Darity, professor of economics at Duke University, in Mashable’s article on black banking.
Read more about the positive impact black banks are having on communities of color.
Data You Can Use
Of community bank customers report satisfaction with their financial institution
The Story:
Not only do community banks engage in community development at greater rates than national banks, they consistently generate higher customer satisfaction scores than big banks, according to the American Customer Satisfaction Index for 2024. The annual survey on banking satisfaction finds that community banks scored 80 out of 100, whereas national banks ranked six points lower at 74 out of 100. With small business customers, the satisfaction gap grows even wider. The Small Business Credit Survey finds that net satisfaction for business owners holding accounts with community banks is at 74%, besting larger national banks by a whopping 21 percentage points.
The Takeaway:
One major factor contributing to such high satisfaction rates is the connection customers feel with their community banks. “Community banks pride themselves on personalized service,” according to the 2024 BNY Voice of Community Banks Survey. “To keep pace with changing times, many have been upgrading their technological capabilities to offer online banking, automated loan decision-making, and other cutting-edge services.” These upgrades allow community banks to compete head-to-head with big banks. Even more, customers trust community banks to provide tailored solutions that meet their financial needs today and for the long term.
Source: American Customer Satisfaction Index, “Customer Satisfaction in Community Banks,” October, 2024, Fed Small Business, “Small Business Credit Survey,” March, 2024, and BNY, “The Voice of Community Banks Survey,” September, 2024
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