Saving time and money were primary drivers of community bank IT spending last year, as many of the country's smallest banks got squeezed; not typically from securitization woes, but from the housing market freefall that crippled many retail borrowers and made lots of construction loans go bad.

But even before the financial crisis, the price of staying cost-competitive was weighing on small banks; it's now making them ever-more-attractive acquisition targets as the banking industry morphs into a new era. Celent analysts say consumers will soon expect from community banks the same technology offerings they can get from big banks-mobile banking, consumer and business RDC, branch capture and others. Community banks, especially those with less than $500 million in assets, "lack the infrastructure to run these systems in-house and the buying power to drive the ASP price down," writes Celent's Bart Narter in his report, "It Takes More Than a Village: The Decline of the Community Bank." More....

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