9% of small businesses surveyed consider CU as PFI
BOSTON (2/7/08)--While 9% of small businesses surveyed consider credit unions to be their primary financial institutions, 68% of credit unions are focusing their attention on building up their business products and services, according to an Aite Group study.
The study, "How Can U.S. Credit Unions Survive in the Small Business Space?" indicated that credit unions' top two information technology priorities over the next two years are commercial and business banking-oriented solutions. Credit unions also have plans in place to broaden their small-business product offerings and enhance their online capabilities.
Succeeding in the small-business marketplace requires investing time and money, and offering the right products and online capabilities to meet the demands of small businesses, said Christine Barry, Aite Group research director and report author.
"Many credit unions are at a crossroads: Most recognize the opportunities associated with targeting the small-business segment, but the level of importance and effort they plan to allocate to attracting small-business membership divides them," she added.
Credit unions should increase their information technology budgets for business initiatives and hire individuals that understand small-businesses needs, the study recommended.
"The road ahead is not an easy one for credit unions, but those willing to take the necessary steps are likely to be greatly rewarded," the study said.
More than 50% of the credit unions surveyed have member bases consisting of less than 10% business. Eighty-one percent do not have a dedicated small-business banking offering but offer retail banking solutions to small businesses.
Most credit unions are either maintaining a traditional credit union strategy, or shifting from traditional practices to a more commercial path, the study said. Credit unions in the first group are reaching out primarily to "mom-and-pop" businesses to focus on retail services.
The second group hopes to capitalize on opportunities that small businesses could bring and plan to offer more services, the study said.
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