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The history of banking in America is fascinating.\u00a0 Banks have evolved from single branches (legally mandated) in local communities to multiple branches spread across a region.<\/p>\n
The largest banks have joined numerous regions into a nationwide presence. \u00a0<\/p>\n
The transformation from a local presence to national presence didn’t change banking, but the move to digital did.<\/p>\n
Historically a bank served the customers that were near its branches.\u00a0 This was purely due to customer convenience.<\/p>\n
If a bank wished to expand they’d simply build a branch in the area they wished to have a presence in.<\/p>\n
What happened for most banks was they became experts at lending to the specific geographies they had a presence in.\u00a0 If a bank had a branch in Louisiana they became experts on oil and gas.\u00a0 If they had branches in Springfield, Nebraska they were agricultural lenders.\u00a0 Banks specialized by geography.<\/p>\n
[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row use_custom_gutter=”on” gutter_width=”2″ custom_padding=”|||” use_background_color_gradient_1=”off” use_background_color_gradient_2=”off” use_background_color_gradient_3=”on” background_color_gradient_start_1=”#3D72E7″ background_color_gradient_start_2=”#3D72E7″ background_color_gradient_start_3=”#3D72E7″ background_color_gradient_end_1=”#53a0fe” background_color_gradient_end_2=”#53a0fe” background_color_gradient_end_3=”#53A0FE” background_color_gradient_direction_1=”243deg” background_color_gradient_direction_2=”243deg” background_color_gradient_direction_3=”243deg” _builder_version=”3.0.92″][et_pb_column type=”1_3″ _builder_version=”3.0.47″][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”3.0.47″][et_pb_text _builder_version=”3.0.92″ text_font=”Nunito Sans||||||||” text_text_color=”#959baf” text_font_size=”18px” text_line_height=”1.8em” header_font=”||||||||” header_2_font=”Nunito Sans|700|||||||” header_2_text_color=”#535b7c” header_2_font_size=”35px” header_2_line_height=”1.3em” header_3_font=”Nunito Sans|700|||||||” header_3_text_color=”#535b7c” header_3_font_size=”25px” header_3_line_height=”1.3em” max_width=”700px” module_alignment=”center”]<\/p>\n
The Internet upended this model of bank growth, but it didn’t happen right away.<\/p>\n
Banks quickly latched onto to digital transformation bandwagon rolling out online access tools and apps to allow depositors easy and transparent access to their accounts.<\/p>\n
Digital transformation was made in the name of being more efficient (i.e. saving money) and customer retention.\u00a0 A client who had easy access to their money was more likely to stay at the bank.<\/p>\n
The problem with the digital transformation was it increased mobility and mobility wrecked the geographic specialization lending model.\u00a0 In turn banks began to generalize, they’d lend to anyone because those geographic niches disappeared.\u00a0<\/p>\n
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The idea of lending to specific verticals or niche areas of the market wasn’t wrong, it was correct.\u00a0 It’s just that banks didn’t have the tools to identify those niches anymore.<\/p>\n
A second and related issue is a lot of banks feel adrift.\u00a0 With their main geographic specialization gone they don’t know where to turn.\u00a0 It’s hard to gaze across the market and select a vertical to specialize in at random.\u00a0 What if you make the wrong decision? What if the opportunity isn’t that great?<\/p>\n
[\/et_pb_text][et_pb_text _builder_version=”3.0.92″ text_font=”Nunito Sans||||||||” text_text_color=”#959baf” text_font_size=”18px” text_line_height=”1.8em” header_font=”||||||||” header_2_font=”Nunito Sans|700|||||||” header_2_text_color=”#535b7c” header_2_font_size=”35px” header_2_line_height=”1.3em” header_3_font=”Nunito Sans|700|||||||” header_3_text_color=”#535b7c” header_3_font_size=”25px” header_3_line_height=”1.3em” max_width=”700px” module_alignment=”center” locked=”off”]<\/p>\n
The best way to move to a specialization model is to use data to guide your decision.<\/p>\n
Just because your bank is in Louisiana doesn’t mean you need to lend to oil and gas companies.\u00a0 It might turn out that there are underserved areas of the market that everyone else overlooks while clamoring to lend to oil and gas companies.<\/p>\n
The only way to build a path forward is to understand the nature of the market, and then at that point make a decision on where the bank will head.\u00a0 When you have a destination in mind it becomes easy to plot a path.<\/p>\n
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Banks Need to Become Specialists The history of banking in America is fascinating.\u00a0 Banks have evolved from single branches (legally mandated) in local communities to multiple branches spread across a region. The largest banks have joined numerous regions into a nationwide presence. \u00a0 The transformation from a local presence to national presence didn’t change […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=\/wp\/v2\/posts\/240"}],"collection":[{"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=240"}],"version-history":[{"count":2,"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=\/wp\/v2\/posts\/240\/revisions"}],"predecessor-version":[{"id":243,"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=\/wp\/v2\/posts\/240\/revisions\/243"}],"wp:attachment":[{"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=240"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=240"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.completebankdata.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=240"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}