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Community Banks vs. FinTechs: How Do They Stack Up?

Community  Banks vs. FinTechs - Image of CS Bank branch

In a rapidly evolving financial landscape, community banks continue to stand out as pillars of stability, offering a comprehensive lineup of services that merge the best of traditional banking with the advancements of the digital era. These institutions, rooted in the local communities that they serve, provide a winning combination of personalized service, local financial insight, and community investment, all while embracing the amazing technological innovations that customers demand.
This unique hybrid approach to banking empowers community banks to maintain the cherished principles of customer-centric banking while meeting the digital demands of their increasingly tech-savvy members. But how does this approach measure up against the growing list of FinTech options that are the subject of frequent discussions in media and American households nowadays?

What is a FinTech?

FinTech refers to any innovation in the way people conduct financial transactions. Broadly, the term “financial technology” can apply to any innovation in how people transact business, from the invention of digital money to double-entry bookkeeping. Since the internet revolution, financial technology has grown explosively.

Types of FinTechs

FinTechs have emerged as disruptors, leveraging technology to streamline and enhance popular financial services. Broadening the scope of what's possible in the financial sector, some notable FinTech services include:

Online Only Banking:

  • Mortgage and lending services
  • Peer-to-peer (P2P) payment systems including PayPal, Zelle, and others
  • Investment platforms allowing for the buying and selling of stocks and exchange-traded funds (ETFs)

Buy Now, Pay Later Schemes:

A credit card alternative, popular with online retailers that performs like an installment loan for smaller purchases


The use of algorithms that automates financial advice, increasing accessibility and creating new efficiencies

AT CS Bank you can send payments via Zelle, pay your bills online or write a check - close up for a check and a pen

How Do Community Banks Compare with FinTechs?

Putting popular financial service offerings under a microscope reveals important contrasts between community banks and FinTech alternatives:

1. Buy Now, Pay Later (BNPL) Schemes

Allowing consumers to break up payments into a series of equal payments, sometimes with low or no interest, the BNPL option is a popular FinTech offering amongst online retailers. While BNPL options offer payment flexibility, many do not report payments to credit agencies, representing a missed opportunity for consumers to build credit. These programs have other downsides such as no rewards programs like those offered by credit cards, and complications in exchanges/returns requests and disputes.

A better choice? CS Bank has partnered with TIB Bank to offer Mastercard credit cards at competitive rates and with some great rewards options.

2. Mortgages

Community banks like CS Bank’s CS Home Mortgage offer streamlined online applications alongside personalized services and a range of options, effectively countering the misperception that FinTechs offer the fastest route to mortgage approval.


3. Personal Banking

The digital revolution has not left community banks behind; in fact, they have embraced online banking with a host of benefits:
  • Community banks provide quick and easy account applications online for savings accounts, checking accounts, and more
  • Online banks are sometimes perceived as featuring better rates because of lower overhead costs. While many online banks are competitive in this area, better rates, including high interest checking accounts, are found at a community bank like CS Bank
  • Depositing funds at an online bank involves barriers that community banks easily overcome – an online bank will often require the user to have an external checking account for transfers of funds, making it cumbersome to use an online bank exclusively. Community banks, on the other hand, allow deposits via ATMs or ITMs, mobile deposit, money orders, in-branch visits, or reloadable prepaid debit cards
  • Check writing can be difficult for those banking exclusively online – nuisances include a limited number of available checks and impractical requirements to complete a check writing request online and wait for service provider to send via traditional mail
  • Deposits held at community banks are FDIC-insured, a protection not always provided by FinTechs

4. Person-to-person (P2P) Payments

Offering the convenience of quick payments, digital tracking, and enhanced security features, P2P payments have become increasingly popular and widely accepted. Community banks, including CS Bank, now offer well-known options such as Zelle in addition to their own P2P systems.

Are you concerned about security when using P2P systems? Find out how to safely use Zelle with our free guide on How to Recognize and Avoid Zelle Scams.
With a community bank, you can apply for a mortgage or meet directly with a lender - Image of couple meeting with a lender

5. Digital Banking Tools

Some misconceptions suggest that community banks use outdated technology and lag behind trends in financial innovation. In fact, many community banks feature robust digital portfolios that include the most popular digital banking tools, such as:
  • Personal Financial Management Tools like CSB Insights
  • Small Business Financial Management software (e.g. AutoBooks)
  • A Digital Wallet service allowing individuals to make electronic transactions and manage payment information using a secure digital platform
  • Online Chat services providing live technical and account support during normal business hours
  • Person-to-person (P2P) payment systems, including Zelle

6. Digital Investments

Effective advertising campaigns and compelling news headlines often make FinTech investment innovations like RobinHood a household name. Helping to make investing easy for users, these types of services are well-suited to those just starting out but may not be the ideal choice for users who could be better off working with an investment professional as their wealth grows.

Community banks, like CS Bank, take a different approach – a wealth management department actively assists investors as they make important decisions about investing for the future. Coupled with personalized service from advisors who understand an investor’s financial circumstances and future goals, this option is ideal for building a customized investment strategy with the best chance of success.

It’s never too early to start investing. Check out Wealth Management 101: An Investing Guide for Millennials.

What Truly Separates a Community Bank from a FinTech?

The distinction between a community bank and a FinTech goes beyond the mere services they offer; it lies in the core values and the relationships that they develop with their members. Community banks like CS Bank offer:
  1. Customer Service: Personalized attention with the ability to speak to a live person in your local area, avoiding long waits on calls. FinTechs lack face-to-face interaction whereas community banks provide rewarding and convenient human interaction over the phone, online, or in-person with walk-in visits or easy-to-use appointment schedulers
  2. Community Focus: Local banks demonstrate a commitment to the community through employment of local residents, community sponsorships, donations, and volunteer events
  3. Financial Expertise: Community banks provide access to financial experts for advice on mortgages, loans, investing, and account services, with a variety of products to meet diverse needs while FinTechs rely heavily on self-service functions in their service offerings
You can deposit cash at your community bank - Person handing cash to a bank teller

Cutting-Edge financial services with commitment to community

By choosing CS Bank, members gain access to a full suite of advanced digital tools that streamline financial management, aligning with the new efficiencies and incredible speed of today’s technological advances. At the same time, CS Bank’s commitment to personalized service shines through, helping ensure that each member’s unique financial journey is supported with a human touch.

CS Bank invites you to experience a banking relationship that’s grounded in community values and propelled by digital innovation. It’s more than just banking; it’s a partnership that fosters personal growth, supports local initiatives, and embraces the future while retaining all the intimate and personalized elements of traditional banking.

Disclaimer: This article is for informational purposes only. For advice regarding your specific financial situation, please consult a financial planner or a trusted financial professional.