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Seizing the Business Banking Opportunity

A Discussion with Chris Cox, Chief Operating Officer, Apiture


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Digital Banking and Financial Wellness


It’s been a few decades since credit unions first started talking seriously about member business services. Back then, the big topic of discussion was: Can my core data processor support member business services? Fast forward to our current all-digital, all-mobile, all-the-time era and there’s an even more important question: Can my digital banking provider support member business services?

Credit unions are wise to be interested in the small business market. According to the U.S. Small Business Administration, 99.7% of all American companies with at least one employee are considered small businesses. What’s more, between 1995 and 2021 – COVID notwithstanding – small businesses accounted for 62.7% of U.S. job growth. The national small business banking market is worth tens of billions of dollars.

With this in mind, Finopotamus spoke with Chris Cox, COO for digital banking provider Apiture, about best practices for credit unions seeking to serve the small business market. Apiture is one of the few digital banking providers that built business banking into its platform from its very inception.

Consumer Digital Banking Won’t Cut It

Many credit unions may be tempted to retrofit their consumer digital banking platform to service business members. According to Cox, this is a mistake.

“I want to state clearly and emphatically that trying to retrofit a consumer banking platform for businesses just doesn't work,” said Cox. “That's because, fundamentally, businesses have different needs than consumers. Primarily, they center around things like payments. Businesses have different payment needs that need to be addressed, specifically around ACH and wire-based payment initiation.”

Because small business owners’ time comes at a premium, it’s imperative that they be able to conduct all their banking digitally, including deposit account opening and loan application.

“You should never have to go to a branch. That's just fundamental today,” stated Cox. “If you're telling a member they have to go to a branch to do something, you probably have lost them in 2023.” He noted the best banks make it very easy to conduct business digitally, making it necessary for credit unions to do the same.

“It's really easy for people to establish relationships with the national banks over digital channels,” he observed. “If I'm a business and I'm looking for a loan or a deposit product, and I search online, my credit union has to be there. I have to be able to find them and know that they offer the products, but I also need to be able to start a relationship with them. If I search online and I find a credit union that has exactly the loan product I need, or the deposit product I need, but then I can't act on that, what’s the point?”

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Cox explained that a credit union without the right digital business banking services risks losing the consumer relationship as well as the business relationship because most small business owners prefer to conduct both business and personal banking with a single institution. He noted, “If you look at the research, consumers and businesses are surprisingly willing to change financial institutions if they feel like they're not supported well from a digital support standpoint.”

Table Stakes for Digital Business Banking

What are the features every digital business banking platform should offer – but your consumer digital banking platform doesn’t include?

“When you get into business, as I mentioned, you start to look at ACH payment initiation to do things like payroll or pay your suppliers,” said Cox. “You start to look at wire origination, which is something consumers don't typically need, but many businesses do.”

Cox added that business members need more sophisticated fraud tools. “You think about a whole different set of fraud management services that businesses need,” he noted, “that are add-ons around payments like ACH positive pay.” He added that businesses also have a more acute need for cashflow management, “especially a small business who's worried about making payroll every month or every quarter, or paying bonuses every year.”

Entitlements, i.e., the ability to configure different digital banking users for different roles, is often critically important for small businesses. “This is a major reason why it's difficult to retrofit a consumer banking platform into business banking,” Cox explained. “Businesses have more sophisticated entitlements – what you might call role management. If I'm a business owner, I want to control my account and manage my account through digital banking, but I only want to grant a subset of those privileges to certain other employees.” A proper digital business banking platform will be fully configurable in this respect.

“Maybe you've got employees who can initiate payments, but someone else needs to approve those payments before they're sent,” he continued. “Maybe you've got employees who can just view accounts and do no transactions. Maybe you've got employees who can view certain accounts and transact on certain accounts, but not other accounts because you don't want them to know, for example, what everyone gets paid.” He added this this sort of role management is a very common need for business users.

The Credit Union Difference

In closing, Finopotamus asked Cox how credit unions can differentiate themselves to business members beyond the technology they offer.

“Service, service, service,” he said without hesitation. “It sounds like a cliche, but it's true. Even businesses want really great member service. And I think the most successful credit unions are going to be the ones who can marry together relevant digital technology with really great service.”

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