How to Do a Competitive Analysis

Community banks have their hands full with a lot of responsibilities. But one they can take on that will reap significant benefits is investing the time, money and resources into learning as much detailed information as possible about their competitors.

“Community banks stand to gain significantly by understanding their competitors, both other community banks and larger regional and national institutions,” says Bobby Martin, CEO and co-founder of Vertical IQ in Raleigh, North Carolina. Competitive intelligence isn’t just a “nice to have,” according to Martin. It directly supports growth, customer retention, strategic planning and operational efficiency.

“These banks can position themselves more effectively by knowing how others meet customer needs, while also revealing market trends and gaps that guide better product and service innovation,” he says. “Additionally, this knowledge strengthens sales efforts by helping staff address customer objections and communicate advantages more confidently.”

Martin adds that competitive insight enables stronger pricing strategies by clarifying where rates and fees should align with the market. It also enhances risk management by showing how peer institutions approach lending and shifting market conditions. 

“Importantly, it uncovers underserved segments or regions that represent growth opportunities as well, and it supports strategic planning by highlighting where competitors excel or fall short, allowing clearer differentiation,” he says.

How community banks conduct competitive analysis

The first step is knowing what kind of information you should learn about your competitors. “Community banks should focus on understanding what products and services their competitors offer, how they price loans, deposits and fees, and which specific customer segments or industries they target,” says Martin. 

Banks should also evaluate the customer experience that competitors deliver, from onboarding and digital tools to relationship management, and identify their strengths and weaknesses relative to the bank’s own.

Assessing competitors’ technology capabilities, marketing strategies and messaging provides insight into how they attract and serve customers. In addition, according to Martin, analyzing branch footprints and local market presence helps a community bank understand how aggressively others are expanding or contracting.

“Finally, monitoring financial health, growth trends and strategic moves, such as mergers or new product launches, enables community banks to anticipate shifts in the competitive landscape and adjust their own strategies accordingly,” says Martin.

Using competitive intelligence to improve bank strategy

Once community banks learn about their competitors, they can make some changes and improvements to the ways they operate to benefit from what they have learned. 

“Community banks can improve their operations significantly by using what they learn about their competitors to refine their products and services, adjust pricing strategies, and enhance customer experience,” says Martin. “Competitive insights help them identify product gaps, tailor offerings to key industries, and balance loan and deposit pricing to stay attractive without eroding margins.”

Competitor intelligence also supports stronger sales and marketing efforts by sharpening messaging, equipping frontline teams with talking points and targeting segments or industry niches where competitors are weaker. By understanding competitors’ risk appetite and lending patterns, community banks can fine-tune credit policies and recognize emerging risks or opportunities.

Case study: How FinWise Bank built a competitive growth strategy

One community bank that found benefits in learning about its competition and making relevant changes is $967 million-asset FinWise Bank in Murray, Utah. 

“When I first arrived at the bank, my initial step was to inventory the local banking landscape,” says Kent Landvatter, then CEO and president and now chairman of the board and CEO of FinWise Bancorp. 

At the time, the bank was known as Utah Community Bank. “Within just half a mile, there were 10 banks and credit unions, each offering a variety of products at competitive pricing,” he says. 

Recognizing the bank’s strengths, which had always been its deep product expertise and strong customer relationships, management also acknowledged the challenges posed by its relatively small size. Competing locally was difficult, as larger banks benefited from economies of scale, enabling them to offer bigger loans and a broader suite of products. “A purely local strategy wasn’t sustainable for long-term growth,” Landvatter says.

To address this, Utah Community Bank became FinWise Bank and shifted its focus beyond its geographic footprint. “We began developing subject matter expertise in specialized lending areas on a nationwide basis, such as SBA [Small Business Administration] lending for select industries,” says Landvatter. “This allowed us to compete more effectively on a national scale.”

The community bank also saw tremendous opportunities emerging from technological advancements. Management believed that technology would not only enable the bank to reach customers outside its immediate area but could also allow it to deliver a wider range of banking products to more people than ever before.

As a result, in 2016, FinWise launched its fintech lending arm, which has been a dynamic part of its business ever since. Landvatter says that more recently, the company has expanded its fintech offerings into card sponsorships, payment processing and a lower-risk, credit-enhancing lending product, “further diversifying our offerings and reinforcing our commitment to innovation.”

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