How Small Banks Are Innovating

How Sm all Banks are Innovating
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When it comes to innovativeness, small banks
come shown that size does non matter. Small
banks, which we define as those with less than
US$ 10 billion in assets for the purpose of this
paper, typically include the likes of Credit Unions
and alliance Banks in the U.S., Building
Societies in the U.K. and Co-operative Banks in
India. (Some of these do view a large presence
and balance sheet, but they are the exception
rather than the rule). That being said, these
banks break a lot more in common, such as a
co-operative structure, membership-based model
and an aversion to risk.
Forced to compete against the biggies on the
same terms, these institutions have overcome
many hurdles with an innovative approach. Before
we understand how theyve gone close to this, lets
take a quick look at the challenges they face:
Small banks receive no concessions for their
size, and generally have to adhere to the
same rules and regulations as large banks.
They lack salt lick and have hold in financial
resources to spend on marketing, distribution
and other things.
Since they turn tail within a restricted
geographic area, they are unable to rove out
a wide suite of products to a huge
customer base.




entirely its not all bleak, and small banks do have
original advantages which they must continue to
capitalize on.
Trusted relationships: Because credit unions,
participation banks and co-operatives are funded
by their members who are also the users of
products and services, they form more than closer
customer relationships. It is for this reason that
these banks continue to enjoy a proud level of trust.
Strong community identity: Small banks
limited geographic reach is their blessing in
disguise - by concentrating all their activity within
a region, they have built a blotto identity and
relationships among the local community as well
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