Lessons Learned In Integrating Business Members

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A false start on business services technology taught Fairwinds CU the importance of real-time integration between personal and business accounts, according to Mathy Hogan, assistant vice president of Business Services at the $1.2-billion CU.

Two years ago, Fairwinds added a disparate business banking platform that allowed its 4,100 small business members access to a range of deposit, insurance and loan products.

"What we didn't realize when we were using the separate business banking solution is that small business owners are always working between their personal and business accounts," Hogan said.

Because the business banking and core systems weren't built to talk to one another, "we were never able to offer our members a real-time picture of their accounts" she continued.

Fairwinds' expansion into business services technology was complicated by the fact that it had a deposit services program in place long before lending services, Hogan added.

Today, Fairwinds is no longer using the business platform. "However, we've been able to continue to offer all of our products, but with a lot of extra work done by at least one full-time employee," Hogan explained.

Now, the CU is narrowing down the choices for a solution that embraces both personal and business banking, she said. Fairwinds is choosing from integrated solutions offered by Fidelity Integrated Financial Solutions, Open Solutions Inc. or USERS.

Marrying personal and business accounts into one core processing system is critical for credit unions that, like Fairwinds, have gone beyond basic business deposit and lending products to a full-line of business solutions, including payroll capabilities, wire transfers, ACH origination, online banking, merchant services, insurance products, debit products, commercial mortgages, business credit cards, lines of credit, letters of credit and term loans, Hogan said.

An integrated, real-time picture is important for business lending, she added. "Business lending is so different from personal lending. Seeing the total relationship helps you construct your business offerings."

Fairwinds will also make sure the integrated system features automated transaction tracking.

"We're noticing that our weakness is in the business deposit offerings," Hogan said. "We'd like to track our members' transactions so that we can set up a more sophisticated pricing structure on the deposit side."

The deposits pricing structure could reflect transaction levels and minimum balances, for example, she said. "The pricing structure will help us go the next level and attract that middle market business accounts, not just the small business accounts," she explained.

Fairwinds' business loan portfolio is at $42 million, business deposits are at $23 million, and business non-interest revenue is more than $200,000, said Hogan.

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* Fairwinds CU at www.fairwinds.org

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