There I was, minding my own business, scrolling through Facebook to see what I'd missed that day. Someone's kid said something cute. Someone else ate a delicious-looking lunch. Then I saw it: A post by a local friend and small business owner about her frustration with her large, national bank. She was asking for opinions on where she should take her business (and personal) accounts. She really wanted to join a credit union. (The cooperative structure appealed to her.) But her business model includes traveling with her handcrafted wares via truck across the country to vend at large shows. She needed to be able to deposit large amounts of cash after each show before making the long drive home to Baltimore. She didn't think it was safe to travel across the country with the amounts of cash she deals with at the events. I wondered: What about shared branching? I also wondered if the appearance of a lack of a national network of locations scared other small business owners away from credit unions. So I talked to Sarah Canepa Bang, chief strategy officer for CO-OP Shared Branching at CO-OP Financial Services, a CUES Supplier member in Rancho Cucamonga, Calif. When it comes to serving small business members, "We have some capabilities now. We're working on expanding the transactions available and will be looking for credit union input very soon," she says. Right now shared branching is geared to humans not entities. But a business owner can do some limited things in shared branches, including making cash deposits and some check deposits, especially if the name of the business is the name of the business owner. But because businesses have a lot of checks, that is a real challenge for acquiring credit unions because it takes so much teller time, Canepa Bang says. Remote deposit capture could be an option for business owners. "But as a business owner, do you have time to sit around and take a photo of 25 checks when you could just go over to a branch? This is where shared branching could fill a void," she adds. CO-OP is working on solutions to make it easier for small business members and credit unions participating in shared branching. "Since 2008, the number of small businesses is growing," she says. "This is where our members are going. This is taking credit unions where our members are. If members are in small business, then CUs need to provide services that small business owners need. In a lot of cases, it's locations for making deposits--check and cash--and getting cash for retail. Shared branches can do that." High-tech ATMs at shared branches are another good option for business account holders. "We don't want people using branches for things they can do at ATMs," says Canepa Bang. "Providing services for business accounts may not be right for every shared branch outlet; we get that, and we don't anticipate every outlet will want to offer those services," says Canepa Bang. "That said, there are credit unions that must have a branch presence, but with declining transactions, are facing a squeeze. This could be a way to keep the right kinds of transactions coming in." Person-to-person payments is another important tool for small business owners. Think about someone like a Medifast consultant, someone who uses PayPal or Square for payments, says Canepa Bang. A credit union P2P option could save that member a lot of money in fees and service charges. What do you think about payment technology and shared branching as tools to attract small business owners? Will they make credit unions more appealing?
Theresa Witham is a CUES senior editor. CUES School of Business Lending is facilitated by the same experts who train state and federal examiners; attend all four and learn to develop a successful business lending program that is right for your credit union. Photo credit: Dollarphotoclub.com/grounder
