2019 Journal of Community Bank Case Studies

2019 COMMUNITY BANK CASE STUDY COMPETITION

the playing field allowing Kish to be more competitive. Moreover, decreased regulation would free up time and resources to allow management to fully focus its efforts on its business going forward. Customers and Changing Competition As a smaller bank, Kish is not always able to offer the same products for the same prices to its customers. Therefore, it must find other ways to differentiate itself from the competition. This is achieved through exemplary customer service and a focus on technology and innovation to better serve its customer base. These encompass the core values operationalized by Kish as it realizes that the future of the banking industry is changing as are the preferences of a younger generation of customers. Consequently, Kish has set its sights firmly on the future and the potential requirements of both its current and potential customers. To this end, construction on the Kish Innovation Center, which it anticipates will house over 100 team members, is underway and is due to be completed in early 2020. This move away from Kish’s more traditional branch structure will lower its cost base and augment its current digital delivery of banking services to its customers. In making these changes, customer relationships will continue to be priority. Being a customer at a big bank may appear to have more benefits, however as issues arise throughout a customer’s tenure with a bank, the real benefit of a local caring relationship is missing. Kish, with its in-depth knowledge of the local business environment and its customers, help their customers through

Kish has set its sights firmly on the future and the potential requirements of both its current and potential customers.

expenses, it enhances Kish’s ability to leverage its capital by lending to the communities in which it operates. This in turn leads to the money multiplier or snowball effect. For example: a capital infusion by Kish to a small business may result in an increase in the number of employees within the business; leading to an increase in the disposable income of the new employees; who then spend that money in, say, a local shop; leading to an increase in demand for goods and perhaps pay increases for the shop employees; who then have additional disposable income, etc.. In this regard, Mr. Greg Hayes also refers to ‘the rule of 10’ which posits that for community banks, every $1 of capital eliminates $10 of loans. So, if Kish is required to increase capital by $1 million, that is $10 million it is not lending to small businesses and home owners in its communities. Furthermore, a decrease in regulatory burden and scrutiny would not only decrease Kish’s expenses and/or capital but would level

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