Credit unions have experienced significant growth in business and commercial shares and deposits in recent years. High-dollar business accounts have provided credit unions with an appealing avenue for deposit and member growth, and credit unions have capitalized, with the business segment on track to represent nearly 5% of all deposits in the industry.
Traditionally focused on individuals, these member-owned financial cooperatives began offering business banking services in earnest following the Credit Union Membership Access Act of 1998, which enabled credit unions to expand their fields of membership. Leveraging their community ties and member-centric approach, credit unions began attracting local small businesses and their deposits.
Since these early days of business banking, credit unions have grown considerably in sophistication. Credit unions now offer full suites of business banking products and services, and offer comprehensive financial services tailored to the needs of small- and medium-sized enterprises. With this expansion of services and increase in focus, business members and their deposits have become a key segment of the credit union industry. This growth has been extremely strong over the past decade, with commercial deposits as a percent of total deposits doubling between 2015 and 2023, from 2.2% to 4.4%.
Being able to provide the services required by modern businesses is essential to winning these members in a competitive market. The ModernFi CUSO team helps credit unions attract and retain business members by providing accounts with millions of dollars in NCUSIF insurance*. Most businesses, including small businesses, will consistently hold more than the standard insurance limit in their accounts due to payroll, bill pay, and other expenses. Extended insurance accounts not only help credit unions win new members, they also help strengthen relationships and grow wallet share with existing members.
Looking ahead, the trajectory for credit unions in the business and commercial deposit space is inspiring. The focus on innovation, coupled with an unwavering commitment to member service, positions credit unions well to continue their growth in the segment. By leveraging their unique strengths and embracing new services, credit unions can continue to expand their commercial deposit base and play an increasingly significant role supporting businesses of all sizes.
Best,
The ModernFi CUSO Team
* NCUA insurance provided by program credit unions (subject to meeting certain conditions)
Sources: Credit union data provided by NCUA Call Reports
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