At a strategic retreat of family owned and closely held banks, I was privileged to connect with community institution leaders from the Upper Midwest. As we went around the room, each introduced themselves and shared a little background about their bank and what made them unique. There was an overriding theme that resonated with each individual story: a close relationship with their communities and a deep desire to serve them.

At the start of the fourth quarter, we find ourselves at an interesting point in our national economy. The latest variant of COVID is causing concern with government officials, both at the federal, state and local level. Businesses are scrambling to find staff to re-open their business as supply chains remain questionable. Interest rates are moored at historically low levels and government relief is fading for small and family-owned businesses.

It’s a difficult environment for community bankers, but over the years they have learned how to successfully navigate through good times and bad. In fact, I believe that local banks will be at the center of providing much needed credit and guidance to businesses that have been impacted throughout the pandemic, especially as things begin to rebound – which they most certainly will. At the end of the day, there is no substitute for the local knowledge and underwriting of businesses and individuals right in your own community. In an age of robo-investing and fin-techs, trusting credit decisions to an algorithm with limited human interaction can’t fully measure a borrower’s character or understand their unique business model.

Of course, many will wonder if the community bank remains relevant as technology races ever forward. This strategic imperative was emphasized vividly during the lockdowns when bank branches were closed or limited to drive-through only. Digital transformation was thrust upon community banks and others nearly overnight, forcing enhanced online and mobile banking and digital signatures, remote deposit capture and touchless merchant credit card solutions, not to mention the ubiquitous Zoom meetings.

I believe the community bank’s greatest advantage is their agility to respond quickly in the face of big challenges – an advantage that was successfully tested during COVID. There’s no bureaucracy or endless committee meetings, just practical and timely solutions. It’s about personal relationships and local knowledge that make a difference and create lifetime loyalties. In every community, you will find the bank’s leadership and employees serving on school and hospital boards, local non-profits and volunteering in a multitude of community events. More important, the community bank and the communities they serve have a symbiotic connection. Where you find a strong community, there will undoubtedly be a solid community bank supporting it. As long as banking remains a relationship driven business, community banks should continue to prosper and remain as critical “infrastructure” to the local community.

Artisan Advisors is a consulting group composed of veteran bankers that specializes in providing strategic, operational, financial, and risk management services for community banks. Artisan is driven by the belief that community banking is more than an industry–it’s the life blood of communities, small businesses and families.