What are the differences between community banks and traditional banks?

"Community banking" concept originated in the United States, refers to the handling of business consulting, loans, financial management, bank cards, e-banking and other basic business small branch outlets, is a type of bank service outlets, mainly for the residents of the living quarters to provide targeted financial services. So what are the differences between community banks and traditional banks?

1, the community bank has a small asset size, the operating mechanism is relatively flexible characteristics. Community banks to serve the community for the purpose of a community, a community of an institution, the organization of a simple level, with organizational advantages, more conducive to the transfer of relevant soft information. From the development of financial products, products to the market to product information feedback, the whole process can be completed in a relatively short period of time, management personnel can make timely business decisions accordingly, and flexible response to better adapt to changes in the market environment. The traditional bank into the community outlets are still based on most of the bank's one or two branches or county branch system under the branch outlets, there is a higher bank to support the operation of the organization, the network asset size, business requirements, the mechanism is fixed, a variety of approval processes and procedures are complex.

2, community banks are community-based banks, residents and businesses in the community are more familiar with the larger banks. And community banks in the approval of small and medium-sized enterprises and family loans, not only to look at the relevant customer financial statements and financial data, but also to consider the community these as neighbors of the borrower's character traits, family history and family composition, daily expenses and other personalized factors, that is, to overcome the problem of asymmetry of information between the big bank and the small business, you can be in the more often for the enterprise credit loans. Easier to solve the proxy problem in the loan and understand the customer's income changes, expenditure status and other personal information with a certain degree of confidentiality, which greatly reduces the bank's lending process due to information asymmetry caused by the possibility of moral hazard and adverse selection problems. However, the traditional bank into the community outlets of the community is not familiar with the degree of customer information, information asymmetry problem often occurs.

3, the community bank for small and medium-sized enterprises and residential households, to provide convenient and fast financial services. Community banks have their own characteristics, personalized financial services, its market positioning and "big cities, big businesses, big industry" strategy on the contrary, in addition to the main community residents and community small businesses to provide financial services, in the layout of the network pay more attention to pick up the pieces to fill the gap after the withdrawal of large banks in the market, more in the rural areas and the urban-rural development. In addition to providing financial services mainly to community residents and community small businesses, community banks have paid more attention to filling in the gaps in the market after the withdrawal of large banks in their branch layout, mostly in rural and urban areas. In addition, community banks offer a fairly comprehensive range of business options in terms of retail business for individual customers, including SME and agricultural loans, lower-fee checking and some investment products, different types of building mortgages and consumer loan products, lower-fee credit and debit card services, and automated teller machines (ATMs) and e-banking, among other services. Community banks are more comprehensive and personalized in their approach to customer service than traditional large bank branches that serve the community and go into the community. Traditional bank outlets into the community still follow the head office or one or two branches.

Although the community bank can not directly provide over-the-counter cash business, but can add self-service equipment for cash business. It has the advantage of small investment in low operating costs, while residents work off the bank to work, can be convenient for community residents, to meet the needs of daily consumption.