Three trends have contributed to less-than-stellar results over the past decade for credit union business services programs, according to a recent study by Cornerstone Advisors Inc.—a strategy and technology planning company.
Those three trends are:
1. The bursting commercial real estate bubble, which led to business lending delinquency rates as high as 30% for some lenders in parts of the U.S. that were especially hard hit by the recession;
2. Limited knowledge of business services; and
3. A focus on lending rather than deposits.
That said, Cornerstone believes the time could be right for credit unions to launch or re-energize business services programs.
Cornerstone is bullish on credit union business services programs because small-business owners are feeling alienated from large banks due to impersonal service, high fees, and lack of affordable credit.
And some community banks—primary competitors for credit union business services—have made it more difficult for small business to qualify for affordable lines of credit.
Credit unions with experience offer 10 tips for building or fine-tuning business services programs:
Next: Listen to your members