Much of the U.S. economy is built on small businesses, and providing business services to members and other consumers will help grow the credit union industry as well as help strengthen the nation’s economy. Delta Community Credit Union has invested time, money, and technology to develop an expertise in serving business members because we identified a need for business services in our membership. Many of our members have small businesses and were using other financial institutions or personal products to fulfill business needs. Offering business services is now a key part of our strategy in being an authentic member of the local community. By helping small- and medium-sized businesses, we are helping our local economy.
Business lending for members helps the institution remain a place of financial safety: Having a broader variety of products and funding models provides a more balanced base of risk for the credit union. The business services market is currently fragmented between business banking, commercial lending, and long-term asset acquisition. Small businesses today might have relationships with six or seven financial institutions.
To better serve all our business members’ needs, Delta Community integrates low-cost deposit products with short-term and long-term lending products. Our team has invested in Remote Deposit Capture and has bolstered online banking features such as ACH transfers and bill pay. With regard to lending, we’ve added corporate credit cards and business lines of credit to manage cash flow. For long-term asset acquisition, we’ve added equipment loans and commercial mortgage options. The CUSOs Delta Community partners with add additional value to the credit union, as the power of the cooperative and collaborative structure lies in sharing solutions, best practices, and expertise.
We have phenomenally grown our business members by focusing on wise risk and building relationships. Businesses are different from consumers. It takes time and effort to educate front-line staff about those differences and to train employees to recognize the best products and services for individual members.
The banking industry’s departure from relationship banking to transactional banking is partly to blame for our current economic situation. The state of Georgia has approximately 4% of the banking industry’s assets, yet it accounts for approximately 20% of the bank failures. Many of the customers affected by these bank failures are in Delta Community’s field of membership. New members, driven by safety concerns, are drawn to the atmosphere of relationship banking. To them, it is a novelty.Older, more seasoned customers, appreciate the return of relationship banking. Moving forward, I see the business services market returning to relationship banking, where members connect with one financial institution based on a broad supply of productsand services.