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Community Bank Prefers High-Touch Over High-Tech

While some banks may tout their high-tech services, one neighborhood bank prefers to tout its high-touch services.

With only one location and 20 employees, Palomar Community Bank is Escondido’s only neighborhood bank, according to Rick Sanborn, president and CEO of the bank.

While the commercial bank does offer full-service Internet banking, its philosophy on customer service and community service are intertwined with its banking services.

Because the bank is small, the bank is quick to enact change if needed, Sanborn said.

“If we need to change, we can do it immediately,” he said. Available to customers by phone and in the branch, Sanborn can make on-the-spot decisions and respond to individual needs.

“We can be very free-flowing and customize whatever we need,” he said, adding that larger banks have to follow guidelines that make them very rigid.

– Losing The Personal

Touch To Consolidation

The consolidation of the banking industry in the past years has resulted in a loss of personal touch, according to Mark Reidy, a professor and director of the Real Estate Institute at USD.

Reidy is also a founder and chairman of Neighborhood Bancorp, which is a holding company for a community bank called Neighborhood National Bank in southeast San Diego County.

While there is always room for more competition, Reidy said people might be more inclined to go to a small community bank even if they may have to pay a little more for services.

Being a high-touch bank can also give smaller banks a more loyal customer base, he said. However, loyalties lie in a very narrow margin, he said. If customers know they can get a loan at a larger institution for a much lower interest rate, they might get the loan elsewhere.

Still, he said each customer knows how much they are willing to pay to have the personal attention and comfort level associated with a community bank, he said.

While some large banks are trying to set up smaller departments to step up customer service efforts, others are dismissing this area and charging higher fees to discourage customers, Reidy said.

Still, once a person experiences the level of service available at a neighborhood bank, they may enjoy it and want to have that, he said.

– Staff Trained To

Handle Multiple Tasks

An added advantage of being a small bank is that employees are cross-trained, Sanborn said. As a result, anyone can help a customer, he said.

“We are all about customer service,” he said. “We are also very active in the community and we solely focus on Escondido.”

Consequently, personal relationships have been formed between the bank and the community. About 70 percent of the bank’s customers are known by name by at least one person on staff, Sanborn said.

This type of relationship lends itself to a high level of customer service that a bigger bank can’t offer, he said, adding that community banking is very satisfying.

The staff is comprised completely of full-time banking professionals and everyone is involved in the community, he said, adding that employees receive paid time off to do community service.

Sanborn said that for the most part, the bank has long-term clients and continues to acquire more.

– Plans For Bringing In

More Business Clients

In the next couple of years, Palomar Community Bank is planning on diversifying its customer base and will try to bring in more business clients, he said.

The bank is mostly interested in the small business community, he said.

Expansion is also a goal for Sanborn, who said he would like to have a total of five strategically placed locations around the county.

Reidy said that advertising is often difficult for small banks, due to the cost. As a result, community banks often have a hard time reaching their customers.

Right now, having a Web site is important to banks, he said, adding that currently it is more of a marketing tool than a banking tool.

Palomar Community Bank is in the process of forming an advertising strategy to attract business clients, Sanborn said, but most likely, it will consist of personal visits, direct mail ads, cold calling, and word-of-mouth.

– Limits Set On

How Far To Grow

While growth is definitely in the future of the bank, Sanborn said that he doesn’t want the bank to turn into a Wells Fargo.

Still, Sanborn will admit that there are some things that a big bank can offer that Palomar Community Bank can’t offer. Larger banks have huge bank networks, are able to offer large loans, and have access to ancillary services such as brokerage or insurance services, he said, adding that Palomar Community Bank just focuses on core banking services.

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