Lend an ear, launch a dream: How CUs that listen help small businesses soar

My friend and colleague April Clobes, President and CEO of MSU Federal Credit Union, has a background in marketing. She’s creative, driven and tenacious. Most of all, she’s a darn good listener.

Listening is an art form in which CUs excel in the retail space. Asking questions and offering solutions is central to the consumer experience: Buying a house? Starting a college fund? Saving for a beach vacation? There’s a solution, and it’s easy to achieve online.

But many CUs fail to hear the needs of small business owners, a vital part of our communities’ economic ecosystem—even when they’re directly asking for help. Across the U.S., credit unions are scrambling to make “square peg” consumer products fit into the round holes SMBs need to fill: payroll solutions, access to capital and wire transfers.

Business clients are grounded in digital products designed for consumers. One in 4 small businesses still don’t have a separate business banking account. Those often find themselves wading through workarounds and manual processes to wrangle daily transactions.

Research from Credit Suisse shows that demand for B2B payments is $125 trillion. According to the NFIB Research Center’s 2023 Banking Survey, 36% of SMBs report quarterly bank balances of more than $250,000. That’s a lot of cash to risk in a consumer account that doesn’t offer proper business management tools.

The unfortunate reality is that most CUs invest more time worrying about their lack of digital solutions than embracing technology that will help SMB clients (and their bottom line) soar.

In a recent interview with James Robert Lay, April unveiled a simple truth: “Credit unions have to stop using consumer products as Band-Aids for how digital banking might work for a small business. We must start listening to what small businesses need—not assuming.”

What has prevailed time and again is being present where owners gather, listening to their needs, and creating solutions that balance digital with good old-fashioned personal service—making SMB owners’ lives easier and reaffirming that you are their trusted community partner.

“No one wants to stand in front of their team and say, ‘I wasn’t listening when technology changed. We didn’t adapt, so the competition outran us.'” – April Clobes

Bring balance, digitally and in-person

Most SMB owners are entrepreneurial in spirit. They want to self-serve whenever possible, and they need to feel like they can do routine tasks such as signing off on payroll and approving wires easily and securely within your digital experience.

At the same time, they’re constantly tackling “firsts,” such as managing working capital, gathering tax information, or applying for a business loan. They want a second set of eyes on their documents to ensure they’ve covered their bases—or reassurance from a trusted partner that their application went through without a hitch.

April and her colleagues take this commitment to the next level. At the time of this writing, they are preparing to launch a new market with physical access for members in Chicago—their first branch outside of Michigan. This intentional move was driven by pausing to listen to digital members who sprouted wings after graduation and spread beyond home base. These members love MSUFCU’s digital experience and asked for a chance to integrate those personal in-branch interactions in their new communities.

About a third of SMB owners use two banks and 11% use three or more for business purposes. When your clients are telling you they value and appreciate you, listen. They have choices, and it’s up to you to invest in the service and offerings that keep them choosing you.

Our job is to meet members where they are. To listen, learn and observe. Then, it is our honor to act with intention and help solve their pain points.

“We must create a world-class online experience so busy small business owners can execute their business 24/7. And they want a trusted advisor who can coach or provide financial knowledge. When you do both well, it makes a great experience for your member.” – April Clobes

Meet members where they are

Small businesses are the heart of local economics. So, it’s critical for community financial institutions to help them grow and thrive, reinvesting their dollars into the community to build trust in the circular financial ecosystem.

Said another way, successful CUs seek opportunities to serve SMBs’ needs. To do that, you need to be present when and where owners surface their pain points—which typically doesn’t happen by chance in your lobby or app. You’ll learn the most valuable insights when you pull up a chair at their table, ready to listen.

April’s team is a prime example of how intentional listening gives wings to long-term grassroots solutions that uplift the community. MSUFCU attends local small business networking events, economic development functions and chamber of commerce meetings—not to showcase their wares, but to listen for unmet financial needs.

In one such meeting, leaders of the local flight school shared concerns about the post-pandemic shortage of commercial airline pilots. They wanted to create an aviation training program for graduating high school seniors, but tuition was out of reach for many students—the small business wasn’t set up to finance traditional student loans.

MSUFCU heard the need and got to work on a solution. They partnered with the flight school, the regional airport and a local school district to create the Dreams Take Flight Scholarship, a special loan program and career pathway for future pilots. Seniors can apply online, and loan disbursement and repayment timelines are framed by the flight school’s training costs, session durations and accreditation schedules.

MSUFCU helped a small business solve a critical growth problem by showing up in the community. But they also gave young people a chance to seize their dreams and launched a robust and sustainable revenue stream for the community.

Listening and acting. Problem-solving and growing solutions. That’s what communities do, and that’s the most rewarding part of CU and SMB partnerships. We all take flight together when we brush away our assumptions and give voice to those we serve.