Community Banks Leading with an Innovation Mindset

For $3.1 billion-asset Blue Ridge Bank, innovation is priority number one. Yet in a recent interview, the Luray, Va.-based community bank quickly pointed out that innovation is not as much about the technology investment as it is about the cultural one.

“Technology is a piece of innovation, but so are many other factors,” said Steve Farbstein, chief revenue and development officer. “Your ability to be flexible, your mindset, your protocols, and your ability to function well in an evolving environment all make up your innovation agenda.”

For Jill Castilla, the president and CEO of $322 million-asset Citizens Bank of Edmond, Okla., innovation stems far beyond the technology the bank provides its customers.

“I would not think of innovation as technology; innovation is a mindset,” echoed Jill Castilla, president and CEO of $322 million-asset Citizens Bank of Edmond, Okla. “You have to get around people who challenge the way you’re thinking. If you’re not uncomfortable, you’re at risk of not being innovative.”

With that guiding principle as its lead, Citizens Bank has taken a unique approach to innovation by introducing community-based solutions that extend far beyond the bounds of traditional financial products. From a “bankerless” bank to storefront entrepreneurial space, the bank focuses more broadly than banking and addresses the emerging needs of the Oklahoma City/Edmond area in unique ways.

“Seeking to understand is where we have the opportunity to be innovative,” Castilla noted. “That growth mindset is where it starts and to think less about protecting what we have and more about ‘How do I lean into this and really be part of something to lead where community banking is going in the future?’”

For Blue Ridge, creating a culture of innovation stems from three elements: forward-looking technology, creative staffing, and unique engagement efforts.

Innovative Technologies—Blue Ridge currently has over eight fintech relationships and continues searching for innovative partners daily. “We have a brilliant team working within our fintech unit; they’ve done this for a while, and they know how to decipher what’s noise, and what’s a true partnership.”

Having the infrastructure in place to nurture these relationships has helped Blue Ridge respond to market developments quickly and roll out first first-to-market solutions like the ability to offer bitcoin out of ATMs.

Innovative Staffing — When Blue Ridge went all-in with support of the Paycheck Protection Program (PPP), they helped not only existing customers but other small businesses who needed it—reviewing some 9,700 applications in the process. While the staff at Blue Ridge knew it was the right thing to do for the communities they serve, like many community banks, they found it difficult to keep up with the massive influx of documentation and follow up.

To help alleviate a potential bottleneck, the bank reached out to local business schools to shore up support of application processing, creating a rapid-fire solution to support customer demand and provide valuable experience to students within their community.

“You just can’t beat having a local bank that has the flexibility and agility to help you meet your business needs,” Bear Handlon, owner and CEO of fitness apparel company Born Primitive. “Every time I pick up the phone, I know Terri Ruby [Blue Ridge Bank Market President] is going to get me what I need. As we continue to grow as a brand, I know Blue Ridge Bank will be right there beside us.”

Innovative Engagement — Blue Ridge is also an investor in the JAM FINTOP Banktech fund, which was formed to help accelerate community bank innovation. These moves are all part of the bank's strategy to invest in technology to adapt to consumers’ changing behaviors and capitalize on today’s increasingly digital environment, said President and CEO Brian Plum.

Blue Ridge Bank’s culture of innovation allows them to communicate with the customer on a more personalized basis; create a unique, enjoyable banking experience; and advance its growth goals. As Farbstein put it: “It’s based on mindset. We want to grow, and because of that we keep innovation top of mind. We have visionaries as … thought leaders and subject-matter experts, and that’s part of this whole thing called innovation.”

Charles E. Potts is ICBA Senior Vice President and Chief Innovation Officer.