CAPITOLA, Calif.-How did Bay FCU grow deposits by $1 million a month for 10 months? Simple: they gave their members what they wanted. And what they wanted was business banking options.
In November 2007, Bay FCU introduced several new products, including two types of business checking accounts, a business savings account, certificates, money market and other high-yield savings accounts.
The $650-million credit union, which serves the California counties of Santa Cruz, Monterey and San Benito from its headquarters here, said the results were immediately positive. Within 10 months, Bay FCU grew deposits by $10 million. By July 2008, 355 business member accounts had been opened-a number that grew to 924 by October.
When asked about the demand for these expanded offerings, Carrie Birkhofer, Bay FCU's CEO, told Credit Union Journal the CU is fortunate to have a "committed and vocal" membership base.
"For several years, our members indicated their desire to perform their business banking with us through survey responses, e-mail requests, letters and conversations with our branch staff and management team," she recalled. "After conducting additional market research, we determined the need for high-quality, affordable, member-centric financial services for businesses in our local area was in high demand."
Birkhofer said the business community in Bay FCU's service area is thriving with small- to medium-sized businesses looking for a "truly local financial partner." She said Bay's board of directors wholeheartedly agreed, and the CU began the process of developing a comprehensive array of business services in August 2006.
CU Journal: Once the decision was made to offer member business services, how did Bay FCU get out the word to its members that these services were available?
Birkhofer: Our business product line was created with small-to medium-sized businesses in mind. These types of businesses are actively involved in local chambers of commerce, service clubs and business organizations.
We hired two well-known members of the business community as our business development representatives to begin grass-roots outreach to promote our free interest checking and BayADVANTAGE (SEG) program. Additionally, we implemented a variety of traditional marketing efforts to increase the awareness of business services to our existing members and the community at large. These efforts included business flyers for chamber newsletters featuring our business development team, newspaper advertising, in-branch television programming, website, company intranet site and member newsletters.
CUJ: Of the several types of accounts available, which have been the most popular/best utilized by members?
Birkhofer: The two most popular products have been our Interest Checking account and our Titanium (high yield) Savings account.
While there is demand for our loan products, we have seen a significant interest in our deposit products. Credit cards also are a key product that business owners have adopted. They use this for monthly employee expenses and also as overdraft protection for their accounts.
CUJ: Bay FCU's Best Practices application noted 355 member business accounts had been opened as of July. Please update the numbers, and discuss what the ROI has been on offering member business services.
Birkhofer: To date we have 924 member business accounts. At this point, the program has reached breakeven in a one-year period.
It is our intention to invest in the growth of the program and expand it significantly over the next two years.
BEST PRACTICES
Bay FCU, Capitola, Calif.
Category: Business Services Provider: Open Solutions
