An untapped revenue opportunity for credit unions

What is Treasury Management

It’s time to demystify treasury management. As a credit union leader, it’s essential to understand how implementing a treasury management program will provide a new opportunity to bring value to your business members while adding a new source of revenue.

Treasury management is relevant to ANY size business. Determining proper levels of cash needed allows companies the ability to meet their financial obligations. We all know that a major cause of business failure is the lack of funding or working capital deficiencies.

Historically, treasury management was thought of as strictly cash transaction products long relegated as a back-office support arm for commercial relationships. This mindset has created confusion in the credit union industry. The good news is that treasury management has steadily evolved into a more strategic line of business, capable of delivering additional revenue, deposits, and value, giving credit unions the opportunity to have a competitive edge in the marketplace.

As treasury management continues to transform as a front-line revenue driver for financial institutions, its value to both businesses and the FI continues to grow; especially in the wake of the COVID-19 pandemic and an ever-evolving economic climate. As a result, the value of treasury management is being catapulted into new levels of significance by becoming a much more strategic, sales-focused line of business.

Not Just for Banks

For decades, the treasury management industry has been dominated by large banks. It’s estimated that the top four U.S. banks account for 59% of the market, with the top 18 banks holding close to 85% of the market share. This is a coveted revenue stream that credit unions can now tap into as a way to increase ROA.

Capabilities now exist that allow credit unions to compete with banks by offering treasury management solutions in a world that historically has only included the largest banks and providers with the deepest resources. Credit unions have an opportunity to finally change the narrative that banks have taken for granted for way too long.

Benefits to Credit Union

The heart of long-term banking relationships is built on the trust businesses place on their FI to reliably and accurately manage their money, provide exceptional customer service, and simplify operations. Treasury management allows credit unions to deepen member relationships and build loyalty leading to greater profitability, enhanced business member relationships, and the ability to compete with banks successfully.

Today’s current treasury management programs are more robust with product suites that include receivables, payables, fraud, liquidity, and information management. What makes the programs even more successful to a credit union is having three areas of expertise creating value and efficiency:

  • Treasury Sales Professionals – Experienced individuals tasked with treasury solutioning (e.g., Cash Conversion Cycle strategy, pain-point identification, cost reductions, risk mitigation, etc.)
  • Program Support – Dedicated implementation teams, training, customer service, and product configurations.
  • Program Management – Strategy development centered on policy/procedure, commercialization, pricing, risk, and profitability metrics.

Benefits to Business Members

From a business member’s perspective, cash and cash flow are the lifeblood for any company. Treasury management solutions are designed to improve company cash flow, reduce costs, and maximize business returns. In addition, as fraud losses continue to increase, risk management is another area where business members need to stay vigilant. Treasury management provides access to leading-edge technology to educate the business member on identifying and protecting against fraud.

How We Can Help

Tru Treasury was formed to help credit unions outline and develop a comprehensive treasury management program that allows you to: generate additional revenue, attract and retain your business members, provide a valued service to your business members, and compete with banks. Having a team of experienced sales professionals with expertise in cash management strategy is vital when implementing a treasury management program. We provide training, implementation, member service, and resources needed to define a sales strategy, recommend pricing, and implement compliant policy/procedures. We are ready to help. Learn more at trutreasury.com.

Greg Conant

Greg Conant

Greg has over 15 years in treasury management advisory and consulting experience. The majority of his career has focused on consulting with business clients to streamline operations, reduce risk and ... Details

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