Changes to MBL rules and a growing realization about the importance of the business segment are leading many CUs to actively grow business services. Business owners are increasingly demanding financial guidance from their FI, and forward-thinking CUs are providing tools to 1) help business members make better financial decisions, and 2) support CU employees in serving their business members.

Consider these two data points:

1. At the end of 2021, less than 23% of credit unions carried more than $1 million of commercial credit on their balance sheet
2. From Q1 of 2022 to Q1 of 2023, the aggregate commercial credit for the entire industry grew 22%

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That’s a lot of growth coming from a small portion of the industry! Further, commercial credit now accounts for 6.5% of total CU assets, up 100 bps from a year prior.

Why are CUs courting Businesses?

There are several reasons that credit unions are increasing (or, initiating) a focus on Business Services. Some of it can be attributed to talent and technology gains in recent years. Though, the two primary reasons relate to the financial value and philosophical alignment of the segment. Businesses are integral to each community where a CU operates, and thus must be a core member constituent. With higher average deposit balance and more sophisticated financial needs, businesses can represent a significant contribution to the balance sheet (see the national trends above!).

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Perhaps more importantly, businesses are looking to their FI for financial guidance. A recent JD Power survey made this crystal clear:

Further, a recent article in CU Insight highlights the rationale for credit unions to focus on businesses:

“Understanding SMB owners’ dreams and gaps in their user experiences provides a starting place to create bespoke products or services that could potentially help achieve their goals. What an amazing opportunity to make something happen beyond typical banking transactions, especially when 2 in 3 SMBs say their current banks don’t understand their needs.”

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If your credit union is interested in serving the Business segment in your community and considering value-added services for both members and account representatives, please schedule a demo with Monit to see how we can help.

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