Community banks operate with a fundamentally different mission than their larger counterparts. They serve as economic anchors providing personalized service and making lending decisions based on local knowledge. This relationship-focused approach delivers measurable results: 80% of independent business customers who use community banks report satisfaction with them, compared to 68% for large banks and just 43% for online lenders, according to the Independent Community Bankers of America (ICBA).
Given this unique positioning, community banks need technology partners who understand and support their relationship-driven model. The Federal Reserve’s “Community Bank Access to Innovation Through Partnerships” points out that alignment of priorities between community banks and their technology partners is foundational to effective collaboration.
This alignment extends beyond operational compatibility to cultural fit. Partners that are customer-service oriented experience amplified success based on this alignment in core values and approach. In other words, when banks and vendors share similar values regarding community impact, projects move forward more smoothly and deliver better outcomes for the communities they serve.
Evaluating Technology Partnerships
Selecting the right technology partner is no longer just a procurement decision; it’s a strategic choice that can shape a bank’s long-term trajectory. As former Federal Deposit Insurance Corp. Chairman Jelena McWilliams noted, “Innovation and inclusion are not mutually exclusive; banks must find ways to modernize while staying true to their mission.” For community banks, this means working with partners who share a vision for sustainable innovation and operate as an extension of the bank’s team —understanding its goals, adapting to its culture and providing consultative guidance. The right partner helps navigate emerging technologies, prioritize investments and build a roadmap aligned with both business needs and regulatory expectations.
Industry specialization becomes crucial in this context. Vendors who focus exclusively on community banking typically offer deeper industry knowledge and more relevant solutions than those who treat community banks as just one segment in a broader portfolio. This specialization translates into better understanding of regulatory requirements, operational workflows and the unique challenges facing these institutions.
Equally important is the quality of ongoing support, which often determines whether a technology partnership succeeds or fails over time. This factor becomes critical given that 46% of bankers cite cost or implementation ability as the largest barrier to adopting new technologies, according to the Conference of State Bank Supervisors. Banks achieve better outcomes when working with vendors whose support staff have actual banking experience, enabling faster problem resolution and more practical guidance during implementation.
Four Actionable Steps for Banks
To build more strategic technology partnerships, community banks should:
1. Create a partnership scorecard. Beyond traditional vendor assessment criteria, develop metrics that evaluate cultural alignment, responsiveness to feedback and willingness to collaborate on problem-solving. Review these metrics quarterly with key technology partners.
2. Establish peer collaboration channels. Connect with other community banks using the same technology platforms to share implementation strategies and innovative uses. Many successful partnerships facilitate these connections through user groups or collaborative platforms.
3. Build balanced governance structures. Form internal technology committees that include both operational staff and executive leadership. This ensures technology decisions consider both daily workflow impacts and strategic objectives.
4. Invest in staff technology literacy. Partner with vendors who provide comprehensive training and ongoing education. The goal isn’t to make bankers into technologists, but to ensure staff can leverage technology to enhance customer relationships rather than replace them.
A Partnership Built on Shared Purpose
In an era where rapid technological advancement and quickly evolving customer expectations often drive fragmentation, the power of shared purpose has never been more critical. Some of the most successful technology partnerships in community banking today are those that unite mission-driven providers with complementary strengths.
These industry dynamics drove the recent decision to join forces between UFS Technology, which delivers core banking, advisory and customer engagement solutions for community banks, and BankOnIT, which provides a secure, compliant private cloud. Both organizations recognized that the evolving needs of community banks demanded a more comprehensive approach than either could deliver independently.
This union exemplifies how shared purpose drives successful collaboration. Both organizations understood that community banks need access to broader capabilities without sacrificing specialized focus.
Building Sustainable Technology Strategies
Balancing technology and relationships have become the defining challenge for community institutions. Delivering what the ICBA calls high-tech, high-touch service requires technology partners who recognize that innovation should enhance, not replace, the human connections that define local banking.
Institutions that prioritize purpose alignment when selecting technology partners position themselves for sustainable growth. They maintain the personal relationships and local focus that define their value, while gaining the operational agility and resilience required for long-term success.
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