From the July 2009 issue of Entrepreneur
With credit markets in turmoil and megabanks in trouble, community banks are thinking one thing: "Where there's chaos, there's opportunity." So says Anita Gentle Newcomb, president of A.G. Newcomb & Co., who sees the credit crisis as a chance for community banks to rise above their convenient, tech-savvy competitors via developments like remote deposit capture, a service that allows customers to deposit checks electronically.

One company helping these small banks close the gap is Texas-based BancVue, which is revitalizing the community banking industry with innovative products like RealTunes, an account that lets customers earn music downloads instead of interest, and RealGiving, which donates earned interest to a charity of choice. The company, which plans to roll out new products monthly, is expected to gather more than $35 million this year, and has been gaining momentum over the last four.

Just 15 years ago, community banks owned 70 percent of the market share in terms of deposits. Now it's down to 34 percent, says BancVue co-founder Don Shafer, whose long-term goal is to put big banks out of business. "Community banks are pretty far behind," he says. "Some are still hazy about online banking and need to come up with a strategy." That's where BancVue and its approximately 600 clients come in. "With that kind of presence, we can be loud," Shafer says.

While BancVue is geeking out community banks, marketing agencies like Creative Brand Communications are giving them an edge. Incommons Bank, one of Creative Brand's clients, is a testament to the power of reinvention. With Creative Brand's help, the formerly staid First National Bank of Mexia changed its name and renewed its focus on building real connections through small but genuine actions--like shaking hands with every customer who comes into the bank. The verdict? "We lasted. It worked," says bank CFO Brad Butler.

Many more banks are following suit, says Newcomb. "My firm is extremely busy this year working with community banks that are looking for ways to differentiate themselves in the marketplace, particularly from an innovation perspective."