Superficially, the revival of US community banks flies in the face of the increase in standardised lending practices of the country’s biggest banks, and consumers’ reliance on digital tools for routine banking tasks. Nonetheless, the community banking model is thriving, especially in the urban areas of the US.
Additionally, one of the more surprising findings of a Federal Deposit Insurance Corporation (FDIC) survey of 1200 banks’ small business lending, published in October 2018, is that when making exceptions to loan policy, big US banks are just as likely to use a traditional high-touch and staff-intensive lending approach to generate and maintain small business clients as community banks, whose assets average about $1bn, or less than 0.1% the size of JPMorgan Chase, the US’s largest lender.
