Credit Unions Can't Afford to Ignore Retail Relationships
As credit unions look to improve profitability this year, SMB and commercial banking have become a central focus. After all, these clients often represent significant revenue streams and are crucial for a financial institution’s success. In fact, Jack Henry’s annual Strategy Benchmark found that 62% of credit unions now plan to expand their business services and target a business niche over the next two years.
However, amidst this focus on businesses, an aspect is sometimes overlooked – the personal banking experience of commercial and SMB clients.
Think about it: Many of these clients also maintain personal bank accounts. These individuals are not only business owners but also consumers with needs, preferences, and expectations regarding their personal finances. So, why not extend the same level of attention and care to their personal banking experience as well?
In recent years, there has been a shift in banking towards emphasizing member-centric approaches, and rightly so. Credit unions realize – and are known for – delivering exceptional retail banking experiences. They also understand how it can be a powerful strategy for building loyalty and retention, including commercial and SMB clients.
Here's why ensuring the best retail experience for commercial and SMB members matters:
By offering top-notch retail banking experiences alongside business services, credit unions can foster deeper relationships with their members. When individuals feel valued and supported in all aspects of their banking needs – personal and business – they are more likely to remain loyal and consolidate their financial activities with one institution.
Providing an excellent retail banking experience also demonstrates a credit union’s commitment to member satisfaction. When members receive seamless service, convenient digital banking options, and personalized attention for their personal accounts, they are more inclined to stick with the credit union for their business needs as well.
Additionally, the competitive landscape is increasingly fierce, making it critical to stand out from other financial institutions and nonbanks. Offering a superior retail banking experience to commercial and SMB clients can be a significant differentiator. It not only attracts new clients but also helps in retaining existing ones, giving the credit union a competitive edge.
There are also greater opportunities for cross-selling. When commercial and SMB clients have positive experiences with their personal accounts, they are also more open to exploring additional services offered by the credit union. This presents opportunities for cross-selling business banking products and services, thus increasing revenue potential.
And finally, investing in the retail banking experience of commercial and SMB clients is an investment in the long-term success of the credit union. Satisfied clients are more likely to stay with the credit union over time, resulting in higher lifetime value and reduced churn rates.
Ultimately, commercial and SMB clients are not just business entities – they are people with personal banking needs too. By prioritizing the retail banking experience for these members, credit unions can strengthen relationships, drive loyalty, and drive long-term success. Investing in the retail experience isn't just about providing exceptional service; it's about demonstrating a commitment to understanding and meeting the diverse needs of every client, both personally and professionally.
About Author:
Parker Graham is founder and CEO of Finotta, a provider of embedded fintech for digital banking. Built by bankers, Finotta’s Personified platform is designed to assist in key financial goals like starting an emergency fund, paying off debt, or wealth building, providing timely, impactful suggestions and strategies to make your financial institution top of wallet and top of mind. For more information, visit www.finotta.com.