Community Bank and Credit Union Trends

3 Big Challenges They’ll Tackle in 2024 and Beyond

Small banks’ and credit unions’ involvement with local communities has traditionally given them a competitive edge over their larger counterparts. But that advantage alone can’t help them overcome aging IT systems and historically high interest rates. To survive, they must innovate and form new partnerships.

Key Question: What challenges must community banks and credit unions surmount to survive what’s been called an existential crisis for smaller financial institutions (FIs)?

Key Stat: High interest rates can hurt growth. About 89% of banks saw the imbalance between their earnings and their payouts as an extremely or very important external risk, according to a July 2023 Conference of State Bank Supervisors (CSBS) survey.

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Table of Contents

  1. Executive Summary
  2. Community banks and credit unions are on the hook to prove their motto, 'smaller is better'
  3. Government efforts to curb inflation and stabilize the industry have hurt smaller FIs more than they’ve helped
  1. Outdated core banking systems threaten to hobble smaller FIs in the tech arms race
  2. Smaller FIs are struggling to win over younger consumers as their older customer base dwindles
  3. Sources
  1. Media Gallery

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Sherry Fairchok


Suzy Davidkhanian
VP, Content
Tiffani Montez
Amy Rotondo