Two CUs, Same Strategy For Serving Biz Members

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The virtual branch isn't just for regular members anymore.

"We want to provide business members with every online tool they need to make their lives easy," said Benson Bolling, director of Business and Card Services at $206-million Alabama CU. "Our online tools work well for our regular members and we are seeing that translate to our business members."

A "significant" number of members who own small businesses opt for the virtual branch rather than visiting a physical branch for consumer transactions - and would be interested in opening business accounts that offered online tools, according to a recent Callahan and Associates poll.

Although business members log onto alabamcu.com to download transactions into Quicken and Money software, pay bills electronically, get e-statements and transfer funds between savings, checking, business and personal accounts at the CU, "the most common usage is to monitor the account from day to day," Bolling said.

Business members can also pay employees or post debits and credits from third parties via an online ACH origination feature, he said.

"Right now, ACH origination has fairly low penetration, but I expect it to become more popular and necessary in the next year," he said.

In all, "members are pretty happy," Bolling said. "In fact, I haven't had requests for online tools other than what we provide."

BECU's Strategy

At the $5.4-billion BECU in Seattle, commercial members have a smaller menu of online tools than Alabama CU members, but "we always consider adding anything we have on the consumer side to the business side," said Arnie Gunderson, director of Small Business Services.

Unique to BECU commercial members is the ability to set access authority according to each user. In addition, business members can conduct intra-institution funds transfers, access e-statements and make loan payments.

Soon to come are online bill payment and transaction downloads to Quicken's Quickbooks.

But BECU business members probably won't have access to ACH origination, Gunderson said. "ACH origination is usually targeted towards corporate customers, which have more sophisticated cash management needs than small business members," he explained.

In addition, online inter-institution, or A2A, transfers are not in the queue for small business members because of "large logistical issues," he said.

BECU is concerned that A2A could enable unauthorized funds transfers, said Gunderson. "With consumer accounts, there are verification methods that can be used to facilitate consumer transactions that just don't work for business accounts. Until we are able to manage that risk we won't be able to offer A2A transfers to our businesses."

Gunderson added that small business members who are sole proprietors have access to greater functionality via the consumer online platform, which already enables bill pay and transaction downloads.

Back at Alabama CU, Bolling said that most online tools boast "very good penetration." However, neither CU tracks usage.

Online tools have been available to business members at both credit unions from the time that business accounts were first offered, in March 2004.

Alabama CU has 31,000 members and nearly 700 business accounts, and BECU has 400,000 members and 2,700 business members.

CUJ Resources

For info on this story:

* Alabama CU at www.alabamacu.com

* BECU at www.becu.org

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