Online Small Business Members Have Spoken

Survey responses indicate that leveraging online tools can help credit unions attract and retain small business members.

 
 

Making the case for credit unions to focus on small business memberss needs is easy. Just look at the figures:

  • There are now over 23 million small businesses, increasing at an average of 14% per year (Small Business Administration)
  • Small business accounts make up 40% of a bank’s profits while only taking up 10% of management’s time (Novantas)
  • Banks earn more than 30% returns on their small business programs (Financial Institutions Consulting)
  • 27% of small business owners are already members of a credit union ( CUES)

How Can Credit Unions Attract This Market Segment?

Time is an important commodity for both financial institutions and small businesses. The Internet channel provides an ideal way for credit unions to efficiently meet the needs of small business owners by saving time and improving their financial management.

A recent Callahan Survey Consortium poll of more than 1,600 credit union online members who also own small businesses revealed that a significant number of them rarely visit the branch, instead relying on the online channel to manage their accounts.

Given this preference for self-service channels to meet both their information and transaction needs – online banking, ATM access, check cards, etc. – credit unions need to understand the features most desired and valued by the members. The survey revealed online features members would like their credit union to offer for their business accounts.

1) Tools For Transferring Funds Between Accounts

Some members are shifting funds between personal and business accounts as part of their ongoing financial management strategy. Not only do they want to do this electronically, they want quick transaction posting along with a thorough understanding of the time it will take transactions to be posted.

2) Need for Convenient Ways to Make Deposits

Small business owners often do not have time to deposit checks in person, but need to have access to these funds as soon as possible. Many mentioned that they would like to make deposits by ATM. Technologies such as Ecco (a check scanning system) and Upost ® (deposits by mail) that provide alternative ways to make deposits will go a long way toward increasing member satisfaction and decreasing branch traffic.

3) Account Data Download Capabilities

Members want the ability to easily download and export account information for usage in small business accounting software programs. Quicken and Quickbooks are the top two most popular software programs used by small businesses; Peachtree is used to a lesser extent.

 

 

 

June 20, 2005


Comments

 
 
 
  • Can someone comment on #1, moving money from the business account to the personal account? This is an easy way for embezzlement in a corporate account.
    Anonymous
     
     
     
  • Interesting article. Would be even stronger to comment on what CU vendors and select 3rd parties are doing to facilitate online cash management. Keep up the good work.
    Anonymous
     
     
     
  • The ability to transfer funds between business and personal accounts would have to be provided only for accounts which were opened solely by the small business owner. You also wouldn't want this funds transfer capability activated in cases where another employee at the small business has access to the account. - Denise Senecal, Research Manager, Survey Consortium
    Anonymous