Why Community Bank Accounts Must Pass the ‘Everyday Test’ to Stay Relevant
Community banks are urged to ensure accounts meet the 'Everyday Test' for active usage and transaction ease, crucial for maintaining financial flexibility. New data reveals that while many banks have modernized tech, accounts are not often used as primary financial tools.
Why it matters: This emphasizes the need for consumers to ensure their community bank accounts are active, supporting direct deposits and easy transactions, to avoid dormant accounts that could potentially limit financial flexibility regarding credit access and cost-efficiency for everyday expenditures.
What Happened
Community banks are finding themselves at a crossroads, compelled to ensure their accounts pass the ‘Everyday Test’—a standard requiring bank accounts to effectively receive income, facilitate outflows, and support easy transactions. According to a report from PYMNTS, although 55% of decision-makers at community banks believe they have modernized their technological infrastructure, many accounts still fail to become the primary financial tool for consumers. This suggests a disconnection between technological advancement and actual usage.
The landscape of instant payments is also shifting rapidly. The use of instant payments for income has surged from 15% in 2020 to 45% by 2025, reflecting a significant trend toward faster financial transactions. However, only 24% of community banks currently have the capability to receive FedNow instant payments, while a mere 9% have the ability to send them, despite 44% planning to enhance these capabilities soon, based on findings from the 2024 CSBS Annual Survey of Community Banks.
Meanwhile, data from the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED) 2025 highlights that 17% of consumers with bank accounts are considered underbanked, and a good portion of these consumers face barriers accessing financial services—a critical issue community banks must address to remain competitive and relevant.
What This Means for You
For consumers, ensuring that your community bank accounts pass the ‘Everyday Test’ is paramount. An account that actively supports direct deposits, allows for seamless payments, and offers easy access to funds can enhance your financial flexibility and empower you with better control over your money. This can be particularly important if you are one of the 17% who are underbanked and experience higher hurdles in accessing banking services.
If your current bank account doesn’t support such functionalities, consider discussing with your bank about available options or updates that may enhance service delivery. Additionally, if you frequently rely on instant payments, understanding your bank’s current capabilities regarding FedNow or similar services is crucial. This can help in ensuring that your financial transactions are not only swift but also aligned with your everyday needs.
Key Takeaways
- Community banks need to ensure their accounts pass the ‘Everyday Test’ for ease of transactions.
- Only a minority of banks are fully utilizing modern instant payment technologies.
- Consumers should ensure their bank accounts support active and seamless financial management.
Source: PYMNTS ↗
This article was drafted with AI assistance based on publicly available sources and reviewed for accuracy.