Community banks are generating income from commercial clients by charging fees for remote deposit capture services. Small banks are gaining traction by removing barriers to the service by, among other things, providing free scanners in exchange for a larger commitment from a client.
"The conversation is not about raising prices but about offering new capabilities," Cawthorne says. "It is a highly competitive world. Banks need to offer new services that provide value-added" products.
Community National Bank in Great Neck, N.Y., overhauled its fee model after spending more than a month reviewing its service charges and realizing that it was "probably leaving a bit on the table," says Stuart Lubow, the company's chairman and chief executive. To make sure it would stay competitive with larger banks, the $666 million-asset company raised fees but kept them a hair below those of other banks.
Fourth-quarter service charges at Community National rose almost 63% from a year earlier, to roughly $189,000. The company, which mostly serves businesses, prides itself on customer service and flexibility, Lubow says. If a business overdraws an account, someone will call the client to find out what it would like the bank to do.
After implementing the new fees, Lubow was willing to explain the changes to any client with a question, though he says there were few complaints. In some cases the company adjusted its fees if a client had a good reason, such as not being close enough to a branch, for why they shouldn't pay one, Lubow says.
"I don't believe in being afraid to charge customers for good service," Lubow says. "We don't sell our bank on rates. We sell it on service, and with great service there is some cost."