Evolving Alongside Community Banks: A Conversation with ICBA’s Rebeca Romero Rainey

Q&A: The president and CEO of the Independent Community Bankers Association on the dynamics shaping community banking today and her vision for the industry's future. She fundamentally believes community banks play a central role in sustaining local economies by providing a tailored approach that evolves alongside their ecosystem.

As President and CEO of Independent Community Bankers of America (ICBA), Rebeca Romero Rainey is a critical advocate for the nation’s 5,000+ community banks.

In an illuminating discussion with host Jim Marous on the Banking Transformed podcast, Rainey explores the dynamics currently shaping community banking and her vision for the industry’s future.

Q: How has ICBA’s focus evolved during your six-year tenure?

Rebeca Rainey: ICBA’s mission is to create an environment where community banks flourish.

As a community’s needs change, we adjust to equip members with tools for relationship banking while delivering digital convenience.

We advocate for proportional regulation and provide education to help community banks innovate and serve their communities.

As a third-generation community banker who literally grew up in a community bank, I’ve seen a lot of change over time. But it always comes back to our mission.

The word “environment” is key — we look holistically at opportunities, challenges and support needed to promote community banking vitality.

Supporting Community Banks Through Challenging Times

Q: What key accomplishments at ICBA are you most proud of?

Rainey: I’m very proud we exempted community banks under $5 billion from the special assessment related to the failure of SVB Bank. When it failed, the Treasury said taxpayers and banks would share the costs.

We immediately contested that community banks should not pay for the actions of an institution so dissimilar from their model. We stood our ground and articulated the unique story of community banks. Our advocacy succeeded in protecting members from unfair, punitive costs.

This showcased our capabilities to defend the industry as well as the fundamental differences between community banks and other providers. I’m proud of our principled stance and effectiveness in avoiding undue harm to community institutions.

Q: How would you characterize the current state of the community banking ecosystem?

Rainey: Community banks reflect the economies of the communities they serve. This means constantly evolving as local needs change. Technology plays a huge role in meeting customer demand for speed and convenience.

Our innovation programs help community banks leverage solutions tailored to their unique challenges. We come alongside them with tools and an environment where they can continue to provide personalized relationship banking across all channels.

No two community banks are identical — they each respond to their local ecosystem. But they all must balance personalized service with digital capabilities. We support that through ongoing advocacy, education and connecting them to innovative solutions suited to their needs.

Read more on personalization strategies in banking.

Key Challenges for Community Banks

Q: What are the most significant challenges community banks face today?

Rainey: The biggest challenge is one-size-fits-all rulemaking that ignores the proportionality of risk. This contradicts the personalized approach fundamental to community banks.

Another major obstacle, especially in rural markets, is recruiting and retaining talent.

We hear this often from members – building the next generation of community bank leadership remains an ongoing focus.

These two issues create tension – regulation inhibits community banks’ flexibility to serve their markets, while talent shortages make it hard to execute that hyper-local strategy regardless.

We advocate for more proportional rules while providing recruitment and development resources to members.

Q: How do you balance stifling innovation with appropriate regulation?

Rainey: I view everything through a risk management lens first. Regulation should match actual risks, not take blanket approaches. As an association, we aim for a level playing field where consumers access quality services and products.

We welcome competition and innovation as long as the integrity and safety of the overall system are sound. We bring a unique perspective as community bankers on how rules impact local economies that rule writers don’t always fully appreciate.

It’s a balancing act we want guardrails to ensure stability but not at the expense of supporting communities. I try to evaluate the true risks involved beyond assumptions and advocate for regulations tailored to those specifics.

Encouraging Community Banks to Embrace Innovation

Q: How do you encourage laggard banks to innovate while protecting them?

Rainey: Our peer communities foster idea sharing so banks learn from each other. Our ThinkTech incubator introduces solutions tailored to banks’ specific needs and challenges. It’s about continuous evolution, not protecting the status quo.

ThinkTech brings fintechs and community banks together to build understanding. The banks shape solutions to their needs, while fintechs gain insights enabling them to serve this sector effectively.

Community banks that leverage innovation can compete with any financial provider.

It’s about meeting banks where they are and helping them get to the next level through education and accessible solutions.

Q: If you led a community bank again, what would you focus on?

Rainey: I would ensure flexibility to adopt new solutions as needs evolve. This requires close partnership with core providers and talent to support implementation.

While economic factors constantly shift, the pace of technological change remains the key focus area to serve customers well. With constant new challenges and opportunities, awareness and being proactive is imperative.

Core providers create either constraints or opportunities. Given today’s rate of fintech evolution, a truly collaborative provider relationship provides the agility and speed you need to compete. You have to anticipate change and have partners ready to execute.

The Outlook for Consolidation

Q: What is your outlook on mergers and acquisitions among community banks?

Rainey: There is no ideal size — success depends on your market and risk management. While economic headwinds may accelerate M&A, I expect stability. We’re also seeing some new charters emerge. But scale through M&A is not the only path forward.

Many factors like margins, interest rates and talent costs spur M&A. However, well-run banks focused on their communities can thrive at smaller asset levels with the right model. I don’t anticipate runaway consolidation but rather steady, strategic changes.

Every community is different, so universal benchmarks around size are unrealistic. Small, specialized banks can compete through localization, relationships and technology. M&A provides options but is not the only way to flourish.

Dig deeper:

The Evolving Role of Technology in Community Banking

Q: How can community banks balance high-tech capabilities with high-touch personal service?

Rainey: Technology enables community banks to mirror core relationship banking across all channels. The challenge is delivering the same familiar experience, whether in-person, online, or via an app.

Banks must leverage data and solutions to provide seamless, integrated and personalized digital journeys comparable to tech brands. If legacy institutions can’t evolve on pace with changing digital expectations, customers will turn to nimble competitors.

Q: What concerns around new technologies do community banks convey?

Rainey: Adopting new technologies requires managing associated risks and impacts. Banks need to understand how emerging innovations like AI influence decision-making, operations and competitiveness.

The speed of change also causes concern — taking time to educate and vet solutions while serving customers 24/7 is a tremendous balancing act. We provide resources to evaluate

options and strategically integrate at a measured pace. Change is constant, but implementation can be gradual.

Perspectives on the Regulatory Environment

Q: Where do you see the most need for regulatory reform or modernization?

Rainey: Certain regulations like BSA/AML compliance remain disproportionately burdensome based on actual risk profiles. The associated costs and staffing needs hinder community banks.

Principle-based regulation focused on outcomes would help right-size requirements based on each bank’s characteristics. Rules should match individual risk, not take one-size-fits-all approaches.

Q: What concerns do community banks have around regulators stifling innovation?

Rainey: Community banks want to explore emerging technologies responsibly but express uncertainty around regulator expectations. They feel “behind the eight ball” compared to challengers and fintechs.

That’s why collaborative dialog with regulators is so crucial — to provide clarity, enabling banks to innovate with confidence. We help represent their interests in these conversations around guardrails that don’t unnecessarily inhibit progress.

Keys to Innovation Success

Q: What lessons have you learned from ThinkTech about how community banks can successfully embrace innovation?

Rainey: ThinkTech revealed the importance of core modernization. Adopting new solutions requires backend integration and flexibility, which many banks lack. Legacy systems create bottlenecks.

Equally critical is building staff capabilities to implement and leverage innovative tools. Having the right partners and talent is imperative to execute on the vision.

ThinkTech also underscores the need for appropriate security. You must have trusted mechanisms for data sharing and integration with third parties and across channels. Change must come with the proper safeguards.

Q: If you were in charge of a community bank again, what would you focus on regarding innovation?

Rainey: I would ensure flexibility in core systems and provider contracts to integrate new solutions efficiently. With needs rapidly evolving, you want built-in agility.

I’d also concentrate on training employees to use innovations and see them as complements rather than competition. Your team needs the vision, skills and incentives to support transformation.

Carrying on a Legacy of Local Service

Q: What legacy do you hope to leave at the ICBA?

Rainey: I want to carry on my grandfather’s legacy of community banks as pillars of economic empowerment. By supporting an environment where community banks flourish, we strengthen the resiliency of this critical model for generations to come.

If we can continue to adapt and provide scale and solutions to community banks, they can better serve their communities. That sense of purpose motivates and guides me — it’s about sustaining vibrant local economies.

Community banking allowed my grandfather and many others to actualize dreams and uplift towns through service. If ICBA can keep this tradition alive amidst massive changes, we will help thousands of communities thrive into the future.

For a longer version of this conversation, listen to “Future of Community Banking with Rebeca Romero Rainey of ICBA”, an episode of the Banking Transformed podcast with Jim Marous, available here or wherever you get your podcasts. This Q&A has been edited and condensed for clarity.

Justin Estes is an award-winning writer, strategist, and financial marketing expert with expertise in banking, investments, and fintech. His clients include the NYSE, Franklin Templeton, Credit Karma, Citi and, UBS, and his work has appeared in Forbes, Barrons and ThinkAdvisor as well as The Financial Brand.

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