ST. LOUIS -- To be successful, community bankers must assess their competition and determine how best to meet consumers' needs, industry consultant George M. Morvis says.

"The fact that you're the 'independent bank' in town counts for about .0045 of anything," he said at the Illinois Bankers Association's annual convention in a session on competing with nontraditional competitors. "If you're the independent bank in town with extraordinary service and products to meet your customers' needs, that's an attribute."

Mr. Morvis, president and CEO of Chicago-based Financial Shares Corp., said small banks can survive increasing competition if they can continue to be the primary providers for their customer base.

"The one thing that I find missing, especially by many of the community banks, is the information gathering that you use with your customer base and with your market place itself," he said.

Banks should research customers' views of the bank and its products and services, as well as why other consumers don't do business with them, Mr. Morvis said. Banks then must offer the multiple products consumers crave, he said - which is why third-party providers and alliances are becoming more common.

For instance, a community bank competing with a super-regional that has its own proprietary funds probably can't develop its own funds, he said. "But you can compete in the eyes of the customer by having the particular product."

Despite recent focus on nontraditional competitors, Mr. Morvis said community banks can't forget their historical foes.

Big Banks Seen as Main Threat

"I still believe that your primary competitive threat for small community banks comes from the superregional and the money-center banks in terms of competing for dollars within your marketplace," he said.

In addition to the breakout sessions, bankers attended two general sessions at the conference at the Adam's Mark Hotel.

In Tuesday's general session, Karen Shaw, president of the Institute for Strategy Development in Washington, gave a positive outlook for community banks that strategically plan.

At the same session, Samuel P. Golden, ombudsman for the Office of the Comptroller of the Currency, explained the appeals process, and Chicago-area motivational speaker John Cassis discussed the art of leadership.

On Monday, James Gray, treasurer of the American Bankers Association and chairman and chief executive of Harbor Bank, Long Beach, Calif., discussed ABA's role in current banking issues.

Bert Ely, an Alexandria, Va.-based consultant, examined the outlook for banking in Washington, promoting his alternative to government deposit-insurance, the cross-guarantee concept, an industry self-insurance mechanism that Rep. Tom Petri, R-Wis., has included in a deposit insurance reform bill.

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