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Research Report

The Most Valuable Loan Community Banks Don’t Make: The Hidden Value of Consumer Lending

Learn how community banks can turn consumer lending into a lasting strategic advantage.

 

Community banks have long prioritized commercial lending while treating consumer lending as an afterthought. New research from Cornerstone Advisors and Teslar suggests that approach may be costing them deposits, wallet share and future business opportunities.

 

Based on a survey of 1,249 small business owners and executives, the report shows that consumer lending can strengthen commercial relationships, diversify portfolios and help banks defend against competitors. The value isn’t just in the loan—it’s in the broader customer relationship.

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What You’ll Learn in This Report

  • High consumer-lending banks outperform peers. Banks with higher consumer lending mixes outperform lower-mix peers across ROA, ROE, loan growth, asset growth and deposit growth.
  • The opportunity is much larger than banks realize. Small business owners are expected to generate roughly $106 billion in consumer loan demand over the next two years.
  • Consumer lending protects valuable commercial relationships. Winning a customer’s personal loan can help preserve deposits, future borrowing opportunities and overall relationship value.
  • Technology and speed are the difference-makers. Streamlined processes, automated decisions and faster approvals can make consumer lending more profitable and competitive.

Report Stats At a Glance

$106 billion

 

Estimated consumer loan demand from small business owners over the next two years.

80%

 

Share of business owners who would consider their primary business bank for personal borrowing if it offered competitive consumer loan products.

13.4% vs. 10.5%

 

Median ROE for banks with the highest consumer lending mix compared with banks with the lowest mix

Ready to See Real Results With Your Financial Institution?

Solutions from Cornerstone Advisors

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About Cornerstone Advisors

For over 20 years, Cornerstone Advisors has delivered gritty insights, bold strategies and data-driven solutions to build smarter banks, credit unions and fintechs. From technology system selection and implementation to contract negotiations, vendor management, performance improvement programs, strategic planning, merger integration and enterprise program management, Cornerstone combines its expertise with proprietary data and research to help financial institutions thrive in today’s challenging environment. For more information, visit www.crnrstone.com, connect with us on LinkedIn and Youtube, and subscribe to GonzoBanker® for our opinionated take on all things banking.