Geoff Knapp, Chief Growth Officer at Allied Payment Network, argues that community FIs are hanging onto a life ring, fighting for their lives in the golden age of opportunity.

In this episode of the Digital Banking Podcast, host Josh DeTar sits down with Geoff to talk about how younger clients are disrupting the banking industry by opting for megabanks for traditional banking needs because of their digital presence, and choosing fintech for niche services. Geoff says community FIs need to niche down by identifying who they want to target as customers and then taking risks to bring them in.

Listen to learn more about community FI tech opportunities, the importance of being the local coffee shop of banking, and taking risks.

⚡ Community FIs should lean into local.

Community FIs, Geoff argues, offer the local option that megabanks and fintechs will never be able to reach. “The opportunity that particularly community banks and credit unions have is to really dive into being … the local coffee shop, the non-Starbucks coffee shop the community rallies around. Use cases that [help solve] local financial problems [in] local communities [are how they] garner a following and create raving fans who then recommend them to others… But community banks and credit unions really need to lean into their localness. They need to lean into the community, and they need to help connect people financially, locally.”

⚡ There are ways for community FIs to thrive if they know where to look and are purposeful.

Geoff says the key is to stay consistent with their consumers even as they make changes. “In many ways, we’re in a golden age because there are so many new things emerging. If community banks and credit unions think about their technology decisions differently, [they can] unlock the opportunity at relatively low risk and try a lot of different things … You still want to stay consistent with what your value is and what you’re trying to solve. But you have opportunities to do that differently and demonstrate that you’re willing to provide some innovation … When community banks and credit unions look at adding technology providers, they focus on somebody who’s got experience in their market niche,” he says.

⚡ Innovation at community FIs needs to have a purpose.

Geoff argues that to remain relevant, community FIs can’t just change their fintech offerings for the purpose of change. “Community banks and credit unions now have an opportunity to maybe leapfrog some of the larger financial institutions with some of these capabilities that are coming their way. But they can’t just do it through the same ones we talked about before. You can’t just add it to have another checkbox — having feature number 315 and it just happens to have the hot, sexy name of crypto tied to it. That’s not going to do it for you. It needs to be, ‘Hey, there’s an opportunity to innovate and show our customer base that we’re willing to try stuff new, but we’re doing it consistent with why we’re here and what our purpose is, and why you do business with us in the first place,” he says.