Picture this: A thriving local business owner walks into your credit union, frustrated after years of being treated like just another account number by their national bank. They're looking for a financial partner who understands their community, their challenges, and their ambitions. Is your credit union ready to be that partner?
The demand for community-based financial services is at an all-time high. SMBs are actively seeking what credit unions already excel at: competitive pricing, personalized service, and strong local relationships. While national banks chase corporate giants and multinational corporations, they've left a critical gap in the market—one that credit unions are uniquely positioned to fill.
The credit union challenge
According to America’s Credit Unions, credit unions outperform traditional banks in the areas that matter most. In 2023, credit unions offered business loans at rates up to 1.5% lower than traditional banks. What’s even more telling? Credit unions' Net Promoter Score of 61 towers over banks' average of 34—a clear signal that members value the credit union approach.
Yet here's the stark reality: commercial services represent less than 5% of total credit union assets. Industry experts believe this figure could quadruple to 20% or more with the right focus and investment. Why the gap? Three main barriers stand in the way:
- Limited commercial banking expertise within credit union institutions
- Underdeveloped treasury solutions that don't match modern business needs
- Regulatory constraints that restrict lending potential
But these barriers aren't walls—they're hurdles that can be overcome with the right strategy.
Five moves credit unions must make to capture the commercial market
1. Invest in commercial banking talent
Success in business banking isn't just about products—it's about people. Members need experts who speak their language. Whether hiring commercial banking veterans or partnering with Credit Union Service Organizations (CUSOs), now is the time to build your A team. Consider courses like the Cash Management Professional (CMP) certification to elevate existing staff expertise. Remember, your team's confidence will inspire members' confidence.
2. Modernize your treasury capabilities
Competing in the commercial space demands modern treasury platforms. Real-time cash management, automated loan underwriting, and advanced fraud detection are no longer optional; they’re essential. By upgrading these capabilities, credit unions can deliver a competitive commercial experience and gain market share.
3. Leverage your data
Credit unions sit on a goldmine of member data. Use it with the intention to identify market and business member trends. By analyzing existing relationships, credit unions can identify commercial entities within their membership and create services that address specific needs and pain points. Strategic partnerships with chambers of commerce and economic development groups can amplify these efforts.
4. Advocacy
Lending caps and other regulatory hurdles often limit credit unions' ability to serve SMBs effectively. Advocacy efforts to modernize these restrictions are crucial to unlocking growth potential in the commercial space.
5. Tell your story
Credit unions offer lower fees, personalized service, and local decision-making. But most businesses in your community probably think it is for retail banking only. Create compelling narratives that showcase your unique value proposition. Share success stories. Let business members become your best advocates. Your story isn't just about banking—it's about building a stronger community.
The cost of waiting: Why tomorrow may be too late
The window of opportunity is now open as national banks continue their consolidation spree and focus on upmarket corporate clients. But the window won't stay open forever. Businesses are actively seeking alternatives that align with their values and business needs. Credit unions are uniquely equipped to fill this void—but only if they’re willing to invest in the expertise, technology, and outreach required to compete in the commercial space.
The transformation won't happen overnight, and that's okay. What matters is that credit unions step up. Whether your credit union is just starting to explore commercial services or looking to expand your existing program, 2025 can be your turning point.
At Tru Treasury, we understand that stepping into commercial banking might feel daunting. As we enter 2025, credit unions stand to have an extraordinary opportunity to redefine their role in the financial landscape. By committing to stronger commercial programs, credit unions will better meet the needs of businesses in their communities and position their institutions as key partners for their community’s growth. Ready to take the first step? Let's talk about how to transform your treasury management program. Visit us at www.TruTreasury.com or contact our Head of Enterprise Solutions, Jeff Bassett, at Jeffrey.Bassett@TruTreasury.com. Your community's businesses need you. The time to act is now.
