The Small-Business Strategies of U.S. Credit Unions
Report Summary
The Small-Business Strategies of U.S. Credit Unions
Credit unions view winning the small-business segment as both critical and feasible.
Boston, May 19, 2011 – A new report from Aite Group explores credit unions’ opportunity to grow their penetration in the small-business segment. Based on the results of an online survey of 83 U.S. credit unions conducted by Aite Group in December 2010 and January 2011, the report considers ways in which credit unions can leverage technology—including remote deposit capture, online business banking applications, mobile banking, and social media—to serve small businesses.
Credit union penetration into the small-business segment is low, and limited primarily to microbusinesses. Even the 1,000 largest U.S. credit unions, which tend to be more commercially focused than their smaller credit union counterparts, often offer limited business-member services. This is slowly changing as a growing number of credit unions have begun to view winning the small-business segment as critical to their future success. Approximately 20% of credit unions believe they are now better positioned to grow their penetration in the small-business space than they were prior to the start of the financial crisis. Additionally, 17% of credit unions believe small businesses will comprise between 11% and 30% of their total member base three years from now, compared with only 4% that have achieved this to date.
“New and proposed regulations, the need to identify new revenue streams, and a slowdown in membership growth are driving credit unions to grow their penetration in the small-business market,” says Christine Barry, research director with Aite Group and author of this report. “Winning small businesses will not be easy, however; it will require a well-thought-out strategy and effective use of strategic technologies. For those institutions with the right plan in place, the rewards will far outweigh the costs.”
This 21-page Impact Note contains 16 figures. Clients of Aite Group's Wholesale Banking service can download the report.