1. What is a Bankers' Bank
Bankers' Bank is a "bankers' bank in the United States that specializes in serving community banks, and its business objects only include banking institutions inside and outside the state, not general public accounts." These banks are co-funded by community banks to provide them with services and support at scale to help them become more competitive.
Bankers' Bank itself does not directly target retail consumers, but provides banks with a complete suite of supportive financial services such as settlement, payment, investment, loans, card issuance, risk management, etc.
2. Bankers' Bank Background and model
This model originated in the 1970s and 80s, when community banks could not obtain timely settlement, lending, payment channels and other service support in the large banking system due to their limited scale, and even encountered resource competition and service interruptions. To this end, a number of community banks have joined forces to set up bankers' banks, such as the first United Bankers' Bank (founded in 1975 in Minnesota), to solve the needs of settlement and fund aggregation.
As of 2023, there are only about 12 such banks in the United States, and Bankers' Bank is one of them.
3. Bankers' History of Bank (located in Madison, etc.)
Early
days
Formerly known as Wisconsin's Independent Bank, it was incorporated in Wisconsin in 1981, followed by the establishment and operation of Bankers' Bank of Wisconsin in 1984, officially renamed Bankers' Bank in 1993, The service area covers Wisconsin, Illinois, Iowa, Ohio, Indiana, Michigan and other states.
Owned by community banks
Bankers' Bank is jointly owned by member banks and has no single controlling party, allowing it to form a true partnership with community banks and not to form a customer competition relationship with the community banks it serves.
Positioning and Service Mission
Since its establishment, they have adhered to the principle of "Always your partner — never your competitor." to provide community banks with a complete and one-stop bank support service system.
4. Core Services and Product Lines
Bankers' Bank provides a wide range of institutional financial services, mainly including:
Payment and Fund Management: ACH, FIRE (Electronic Cash Flow), Cash Letter Processing, Cross-border Settlement , accelerated payment services, etc.
Investment Business: Federal funds trading, bond accounting services, portfolio management, redebt, liquidity solutions.
Commercial banking services: including loan matching, loan participation, trade finance support, etc.
Equipment and asset leasing: Provide financial leasing services for equipment required by agriculture, manufacturing and other industries.
Bank Card Issuance and Merchant Payment: Assist community banks in issuing credit/debit cards and merchant payment processing.
Residential mortgage support and remarketing: secondary market mortgages, cooperation with Sallie Mae and other programs.
Risk management assistance: asset and liability management (ALM), risk insight report, compliance consulting, etc.
5. Organizational structure and geographical distribution
It
is headquartered in Madison, Wisconsin, USA, and has offices in Chicago, Columbus (Ohio), Demos Moines (Iowa), Indianapolis and other places.
With approximately 200–300 employees, it serves more than 700 community banks, as well as the broader Midwest.
6. Operation mode and business advantages
Economies of scale and cost efficiency
By concentrating the business flow and capital balance of many community banks with many customers, Bankers' Bank achieves cost dilution and provides community banks with a lower price advantage than large banks.
Avoid business conflicts
not facing the retail market, do not compete with community banks for customers, and truly achieve win-win cooperation.
Professional Support and Consulting Services
We have a team of professional Calling Officers to provide customized product advice and implementation for customer banks.
Technology and Compliance Benefits
Continuously update payment networks, risk control systems, and digital channels to comply with regulatory requirements such as the FDIC and the U.S. Patriot Act.
7. Why did community banks choose Bankers' Bank
to provide full coverage: from payment to investment, credit, and risk control, the whole chain of support eliminates the need for community banks to build their own complex teams.
Increase competitiveness: Access technology and products that are synchronized with large banks at a lower cost.
Enhanced Customer Relationships: Community banks can focus on the local market, enhancing customer stickiness and experience.
Stable and reliable: As an FDIC-insured institution and backed by community banks, capital and operations are stable.
8. Industry trends and prospects
Financial
supervision and security regulation:
As U.S. regulators tighten their requirements for financial crime and KYC/AML compliance, such as the strengthening of regulatory policies led by FinCEN, Bankers' Bank will be more trusted by customers.
Opportunities in the digital wave:
Community banks need modern online channels, real-time payment capabilities, and digital security systems, and Bankers' Bank can provide the necessary support.
Continued growth and competitive differentiation:
As peers like First National Bankers' Bank and TIB continue to expand, Bankers' Bank promises to be a core competency in the Midwest.
9. Summary
Bankers' Bank is a unique community banking support organization in the United States, always adhering to the principle of "not competing with customer banks for retail", providing comprehensive payment, credit, investment, card, leasing and risk management solutions. Its structure emphasizes membership and resource sharing, which is essential for enhancing the competitiveness of community banks, achieving cost advantages and operational efficiency. With the improvement of banking supervision and technological innovation, its role as an intermediary platform and support system will become more important.
