By: Anil Goyal
In today’s dynamic financial landscape, community banks are uniquely positioned to offer personalized service and local decision-making—advantages that national card issuing institutions struggle to provide. However, with growing customer expectations and intensifying competition from large banks and fintechs, community banks must adapt and find new ways to enhance their offerings while staying true to their local roots.
Many community banks face the challenge of providing a credit card program that not only meets customer needs, but also allows the bank to maintain control over customer relationships and financial decision-making.
Community banks have traditionally operated under an agent bank program, which limits a bank’s ability to offer tailored credit card products and creates a service gap between the bank and its customers. Now, these banks seek a custom solution built for relationship-based banking—specifically small to mid-sized businesses, municipalities, and non-profits—while generating additional income on their credit card assets.
Nick Salsgiver, VP and Director of Treasury Management at Heritage Bank in Cincinnati, explains, “We wanted the power to make credit decisions for business customers and to offer consumer customers the options they look for in national cards backed by local service.”
This commitment to provide competitive product offerings while enhancing close community relationships is a driving factor behind the decision for Heritage and many other banks to switch from an agent bank program.
Empowering Local Businesses with Tailored Credit Card Solutions
The implementation of a credit card program tailored for community banks significantly enhances its ability to serve local businesses. Small and mid-sized businesses need access to flexible, efficient payment solutions. To meet these demands, banks can introduce credit card options that include business and fleet cards, as well as virtual card capabilities for vendor payments. These solutions allow business clients to streamline payments, improve cash flow management, and boost their operational efficiencies.
By transitioning to a more robust credit card solution, community banks can deepen relationships with their business customers. Rather than relying on a third party to make credit decisions, banks can now underwrite credit locally, giving them the agility to respond quickly to the unique needs of each business. This approach can reinforce the bank’s role as a trusted financial partner for regional businesses.
Driving Growth Through Revenue and Efficiency
The benefits of this program extend beyond improved customer relationships. The move to a more robust credit card solution leads to earning higher interchange income on business and commercial cards, providing a valuable stream of non-interest income on growing commercial banking operations.
By offering a comprehensive suite of credit card products that meet the demands of both businesses and consumers, a community bank can position itself to attract a broader range of clients. The ability to provide features like ePayables, self-service tools, and competitive rewards enables banks to meet the needs of today’s tech-savvy consumers while staying competitive in the marketplace.
The combination of increased revenue, deeper customer relationships, and the ability to provide market-leading services without significant overhead or infrastructure investment can prove to be a winning strategy for growth.
Serving the Community with Enhanced Experience
Community banks can evolve to meet modern financial demands without sacrificing the local decision-making and personalized service that make them indispensable to their communities. By leveraging a turnkey credit card program, banks can create new opportunities to better serve both business and consumer clients while also growing their bottom line.
Central to such a transformation is the bank’s continued commitment to its community. A hallmark of community banks is their priority of offering the same level of service to small businesses and non-profits as they do their largest clients. Implementing a credit card program that supports this mission not only enhances a bank’s competitive edge but also strengthens its role as a cornerstone of local economic development.
As more community banks seek to navigate an increasingly complex financial landscape, Heritage’s success offers a valuable example of how strategic product offerings—like a tailored credit card program—can help banks remain competitive, drive new revenue, and deepen customer loyalty. By maintaining a focus on local service while embracing modern financial solutions, community banks can continue to thrive and meet the evolving needs of their customers.
About the Author
Anil Goyal is the CEO of CorServ company that provides innovative payment card issuing, processing and program management solutions empowering banks and fintechs to successfully deliver credit, debit, prepaid, virtual, and purchasing cards.