Community banks have seen their share of the market wane over the past decades. Where they once held over 40% of banking assets and lending markets in the U.S. in the ‘90s, that number is now closer to 20%. The financial crisis is in part to blame—but lagging technological developments are to blame, too.

Fintechs have the potential to, bank by bank, help modernize the commercial-banking space through more cutting-edge products and services, and assist them in sustaining—or even expanding—their market share. Doing so requires keeping community banks’ core concerns in mind while converting them into vectors for modern local banking:

Retaining a local touch

Community banks pride themselves on serving the residents and businesses where their own branches and employees are located. Leveraging on-the-ground knowledge, community banks see fewer credit losses than other banks and hold a margin advantage through other variables as well. Community bank leaders can perceive technological interventions as a risk, given the potential for the wrong products to dilute the customer’s experience, rather than enhance it.

Fintechs selling products to community banks should therefore emphasize the ways their solutions can bolster the work bank employees carry out, rather than fully replacing it. By reducing the amount of time it takes to complete rote tasks, for example, employees have more time for more in-depth ways of cultivating and maintaining client relationships.

Joining forces

Entering an ecosystem of fintech partners and fellow banks is a tantalizing prospect for many community banks, many of which often function in a relatively siloized manner due to their limited geographic scope.

Fintechs offering a marketplace of products and partners can have the upper hand here by showcasing their use as a portal for further opportunities to modernize.

Offering new products

Finally, especially if fintech tools can help automate manual tasks that take up bank employees’ time, community banks can expand into new product verticals and sectors. Fintechs can highlight the versatility of their servicing and operations solutions to build out and accommodate a wide suite of financial products—helping community banks expand their expertise and impact.