Necessary, Not Optional: The Transformed Credit Union and Advanced Treasury Services
Written by Trish DiMaggio-Zander
Credit unions have transformed over the past decade, greatly expanding their focus on the types of members they serve beyond serving a particular segment of workers, such as employees of a specific government or private enterprise. Because credit union members were traditionally all consumers, the services credit unions provided were targeted to specific consumer needs. However, as segment-focused charters have more recently been converted to community-based charters, broadening new member opportunities for credit unions and expectations, so too have credit union services—and treasury management services are a must.
Many small- to medium-sized businesses (SMBs) can effectively use services are similar to those a credit union makes available to consumers, but larger business customers have a higher level of need for treasury than most credit unions can provide. Moreover, because credit unions do not have a history of providing treasury services, they are often not well-versed in marketing and operating the systems larger business members would expect and demand of their financial institution.
If a credit union wants to be serious about treasury services, then services such as integrated electronic payment acquisition and lockbox processing must be components of their member relationship analysis system. While total check volume across the entire U.S. banking system has declined, business members still receive checks for payment, particularly from other business clients. These payments are significantly higher in average dollar value, making the secure, quick posting of these payments critical to any business. The fact that total check volume has declined may mean business members who used to process their own check payments are looking for a cost-effective outsourced solution. Yet, most credit unions do not have the resources and expertise to start their own in-house lockbox operations and the associated work operating a lockbox entails.
Serving hundreds of credit unions across the U.S., CheckAlt has a strong track record providing the resources and expertise to meet the growing demand of credit union business members for treasury management solutions. Our outsourced lockbox solution allows a credit union to offer full lockbox services, completely branded as the credit union while the actual lockbox work is processed at any one of CheckAlt’s 13 nationally distributed processing centers. CheckAlt provides marketing support, including branded presentations and marketing collateral for the credit union to market lockbox services to its business members. Plus, partnering with CheckAlt for electronic payments processing including ACH, debit card, and credit card, a credit union can offer a complete payments processing suite of services for even the largest commercial member it may service.
Where costs are concerned to establish such a payments processing solution suite at a business, consider that business members pay for the valuable treasury services provided by their credit unions. The lockbox services we deliver for your business members becomes a source for generating significant non-interest income (NII) via fees. While it may not be the primary reason for offering this strategic service, for those credit unions that pay attention to NII, business member fees can make up a positively disproportionate percentage of total NII and lockbox services can also significantly add to total NII.
Remember, there is a cost to business members today for processing check payments, either within their internal operations for processing accounts receivable or they might already be outsourcing this to a third-party provider. Don’t let the opportunity to deepen business member relationships through valuable and strategic lockbox services pass your credit union by!