- Key insight: Small business is a segment where community banks can take more market share, according to the chief retail officer at Webster Five, a community bank in Massachusetts.
- What’s at stake: Community banks that figure out how to serve small businesses have an opportunity to cement their own longevity as industry consolidation continues.
- Expert quote: “I don’t see them in the market,” the Webster Five executive said about larger banks.
HOLLYWOOD, Fla. — A community banker from Central Massachusetts says the small business banking segment enables community banks to help cement their own longevity in an industry where consolidation continues to create larger competitors.
If community banks can maintain their sense of local touch while meeting customers’ technology demands, the group will be well positioned to bank more small businesses, Brian McEvoy, chief retail banking officer at Webster Five, said Tuesday at
A former commercial banker at TD Bank and Synovus Financial, McEvoy told the audience that he doesn’t think the needs of small businesses are being met by bigger banks.
“At the risk of people throwing things at me, I don’t see them in the market, to be honest,” McEvoy said during a fireside chat. “I think what I’m seeing in the marketplace is the large banks, the TDs and Bank of Americas of the world, that have a full-fledged, holistic approach to how they’re handling these customers. And then there’s smaller banks and community banks that are by and large focused on [commercial real estate] and trying to go upmarket … and there’s really not a lot of banks out there focused on the small business segment.”
Other banks doing business in Massachusetts and around New England may have a different opinion.
TD Bank, a Canadian bank with a large presence in Massachusetts, is also a leading SBA lender in the state. In August, the bank named Chris Ward as its inaugural head of U.S. small business banking, part of a strategy to
Bank of America, M&T Bank and Stamford, Connecticut-based Webster Bank are also large SBA lenders in the Bay State.
At Webster Five, a $1.3 billion-asset mutual bank founded in 1868, the opportunity to bank more small businesses is significant. There are 75,000 small businesses in Central Massachusetts, and they comprise about 75% of all businesses located in that region, according to McEvoy.
The bank’s strategy to serve more small businesses includes a focus on relationship-based customer service, personalization, technology capabilities and training bankers to understand not only how to drive sales but also the economics of banking, McEvoy said.
Partnerships with fintechs are important in terms of providing technology to serve small businesses, McEvoy said. Being in tune with chambers of commerce and other small-business support organizations is also key, he added.
“I think the long and short of it is, you come into a community bank branch, and maybe it has the reputation of being sleepy or behind or whatever, but it is actually some of the most sophisticated and well-respected bankers in the community, and they know the customers,” McEvoy said. “The small business customers coming in the door, they’re serving on not-for-profits’ boards with them, they’re going to dinner events with them.”
“It really is that concept of ‘being local,'” McEvoy added. “I think that really resonates.”
McEvoy was quick to point out that larger banks also have a role to play in serving small businesses.
“I think that’s a different approach, and there’s a customer base for that,” he said. “But there’s also a customer base that’s looking for something more … and that’s where we come into play.”