Why start a bank?
First of all, many potential bank organizers start by recognizing a void or need within the community that can be served by a new institution. Not to mention, community banks promote fair competition and provide quality and customized services for local organizations, individuals and other customers whose needs are not always best-served by working with large-scale financial institutions. From an investment standpoint, organizers are able to make an investment in the community and help strengthen the local economy by providing services such as loans, investments, and so on.
In order to open a new financial institution, organizers must undergo an involved and complex process. New banks must meet many qualifications and adhere to strict regulations as deemed by the various regulatory bodies. The process not only involves the completion of extensive research and market analysis, but also the identification of management, securing of capital and the completion of an extensive application to submit to the regulators. At The Bank Network, we guide bank organizers through the process from start to finish. We help you understand the challenges and the opportunities. We guide you through the regulatory requirements and legal guidelines, and help you build a winning team, from the initial organizers to the bank management.
How to Start a Bank?
The first step in opening a bank is to recruit and assemble a team of organizers. These individuals work together to create and shape a common vision and plan for the proposed bank. While often times the organizers come from a banking background, a team comprising only bankers is not essential. The Bank Network has worked with diverse organizing teams consisting of individuals from a variety of backgrounds, from successful entrepreneurs to community leaders to lawyers and doctors. We do believe it is important to have at minimum one or two individuals as organizers, as they are more likely to understand the rules and regulations uncommon to those in other fields.
Many organizers begin the process with a general idea of where the bank will be located. It is imperative to not only complete research determining a need for a community bank in the proposed location, but to also have detailed plans for operating and marketing the institution. The business and marketing plan is a critical component of the bank application process, and will be highly scrutinized by the appropriate state or federal regulatory agency during the approval process. That is why we first recommend the organizing group first conduct a feasibility study. Once completed and deemed acceptable, the organizers can begin the formal De Novo process.