Orlando's Fairwinds Upgrades DP Solution In Order To Serve Biz Members

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Fairwinds Credit Union is seeing substantial response in just the short time since it invested in technology to serve business members. The $970-million FCU fully committed to business services technology in August.

"Now business solutions are a very large part of the future of Fairwinds," said Larry Tobin, CEO. "We always have to look at new revenue streams, and small businesses in Central Florida are underserved. We wanted to offer our members something equivalent to what they were receiving at a traditional bank, but with the CU difference.

As an example, Tobin noted that many of the Orlando-area's small businesses aren't looking for the million-dollar loans offered by area banks. With annual revenues of up to $25 million, Fairwind's business banking members are looking for loans and credit lines closer to the $100,000 range, Tobin said.

Tobin said that the CU offered a smattering of commercial products and services for a while, including business loans for the past two years. But Fairwinds' consumer loan system just wasn't built to serve business members.

The system was unable to handle common interest-only monthly loans, and fumbled with multiple accounts tied to the prime rate, added Wayne Washington, Fairwinds' VP-lending.

"If business solutions were going to be a major part of our strategic planning, then we needed a system that could handle normal commercial loans," said Tobin.

On the deposit side, business members were asking for sweep accounts and compensating balances. "We needed to offer a more sophisticated account that would suit a business," Tobin explained.

Setting Its Sights

Once Fairwinds set its sights on business members this summer, the 112,000-member CU began seeking a system that would adequately serve those members immediately.

Fairwinds settled on Plano, Texas-based Aurum Technology's business banking solutions. "Aurum was able to meet the needs that our core provider couldn't, and was able to do it on our timeline," said Washington.

In just 60 days, Fairwinds was offering its 2,500 business members a range of deposit, insurance and loan products, including direct deposit services, business checking accounts, terms loans, lines of credit and commercial mortgages.

Already, Fairwinds' expanded menu is paying off. "We recently closed on a $2.9-million construction loan on a church," Washington said.

In the first 60 days, the credit union had eight pending credit requests for a total of $3.5 million and another dozen leads for a total of $15 million. "We're seeing very strong growth now because we have the right tool," Tobin said.

Fairwinds expects its business loan portfolio to reach $15 million by the end of the year, and is looking for $50 million in business loans by the end of 2004, said Washington. The portfolio held less than $500,000 two years ago, he said.

It is further projecting business deposits of more than $22 million this year and up to $38 million for 2004, up from $13 million in 2002. Deposits will represent about 9,600 accounts in 2004, up from 4,200 in 2002.

And Fairwinds will see more than $500,000 in business checking fees next year, up from $213,000 in 2002, he added. All in all, business solutions should bring in $2.8 million in revenue for 2004, up from $395,000 last year, said Tobin. Revenue will be primarily driven by interest on loans and loan origination and checking fees.

Aurum Technology's Credit Union Product Manager, Jim Reddish, said now is the time for CUs to offer business solutions. "With business services in particular, the opportunity for credit unions is tremendous," Reddish said.

"We built a solution that leveraged the capabilities of both Aurum's business services technologies and Fairwinds' existing core system," Reddish continued, "enabling the credit union to meet its objectives."

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