Facilitate Targeting Your Credit Union’s Business Services With Data Intelligence

It’s not only individual members who can make the most of what credit unions have to offer; small- and mid-size businesses can as well!

More than 2,000 credit unions are offering business loans now, according to Curt Long, head of emerging issues and deputy chief economist at America’s Credit Unions. That is up 20% from 10 years ago!

Fast growth inside the credit unions offering business lending, according to Long. Whereas just 8% of credit unions held business lending as more than 5% of their loan portfolio a decade ago, today, the number of credit unions with more than 5% of loans in businesses is up to 18%.

Credit unions can further entrench themselves in business lending opportunities with the right industry insights and data. Host and Co-founder of The Credit Union Connection Sarah Snell Cooke sat down with RelPro Chief Growth Officer Sara Allen to discuss how business development and sales intelligence can help credit unions strategically target opportunities. Plus, Sara says credit unions can follow this piece of advice from Bar Rescue’s Jon Taffer. WATCH and LEARN —->

Read the full transcript:

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Sarah Cooke 00:02

Hello and welcome everyone to The Credit Union Connection. I am your host, Sarah Snell Cooke, of course, and I am here today with Sara Allen, who is the Chief Growth Officer at RelPro. Welcome.

Sara Allen 00:15
Thank you. Appreciate you having me here. Sarah.

Sarah Cooke 00:17
Yeah, near name twin. Gotta have the H. So, while, I'll give you a chance to introduce yourself and RelPro and what makes something unique.

Sara Allen 00:28

Yeah, absolutely. So I, as you said, Chief Growth Officer here at RelPro. I actually joined RelPro about a year ago. However, I have worked with the team, actually as a client for about six years. So I spent almost a decade at American Express, in the middle market field sales organization as a regional director, and actually helped implement RelPro as our primary prospecting solution. So after my time at AmEx, I spent about a year and a half at a FinTech digital bank, and I really got a feel for how the digital banks are so slick with their technology and really nipping at the heels of banks and credit unions that are trying to keep up with the advancements, that everything can be done, you know, at your fingertips in an instant. So it was a, it was a good experience there. Um, for anyone not familiar with RelPro, we are a business development and sales intelligence solution that is being used by banks and credit unions across the country. So we are a data aggregator of over 20 best in class data sources containing company information, business decision makers, executives for those small and medium sized businesses, and we really pride ourselves in the vast amount of data, our easy user interface, which obviously helps with adoption and giving, getting bankers time saving workflows through our integrations that bring in financial data like the UCCs, the SBA loans, commercial real estate and then buyer intent data as well. We also pull in news articles and wealth insights on over 6 million high wealth executives, which bankers also can find, you know, very valuable. We also integrate with the industry research platforms like Vertical IQ and IBIS World.

Sarah Cooke 02:21

Okay, well, lots of lots of stuff there. So, and you've, you've mentioned when we were doing our prep calls that you have data to help reach the minority and disadvantaged businesses, which has come under strict scrutiny in recent years. Most recently, we had a settlement of our mortgages, first credit union settlement with the DOJ regarding redlining, or alleged redlining I should say. What can you offer credit unions in that regard?

Sara Allen 02:55

Yeah, absolutely. And you had, you know, shared that article on The Credit Union Connection about, you know, the credit union that was fined pretty significantly, you know, based on their charter, hadn't been fulfilled, you know, hadn't fulfilled their commitment of that community engagement in the minority, Black and Hispanic, you know, census tracks. So with that said, RelPro actually provides that MBE and DBE certifications, which is ideal for the community banking initiatives and future 1071, reporting requirements. It's really driving a major interest in the company data enrichment, because these companies must be classified for revenue, industry and then the MBE and DBE. We have, it's been a challenge for leaders to get their hands on accurate MBE and DBE data to know who to target, to make sure that they are, you know, fulfilling their commitments. Um, DNB really has kind of been the incumbent provider, but since the data is just self certified, it's not always accurate. So RelPro's MBE and DBE data actually has that federal certification. So I think the lesson here is for all credit unions, you know, to take this extremely vital opportunity to enhance that commitment and be more proactive and intentional in the journey towards creating that more inclusive and equitable future for, you know, their communities and the businesses in their service area.

Sarah Cooke 04:27

Yeah. Particularly important for credit unions and fulfilling their mission, especially, I would think the CDFIs, the community development and financial institutions. So, yeah, I understand, as you mentioned, you have data for all types of businesses. How are credit unions doing in the business lending area? Because I think probably about half, maybe less than half, are involved in business lending currently, and how can they compete, especially like if they're a new entrant, and really make a splash in your community?

Sara Allen 05:02
Yeah, absolutely. So I think credit unions are doing a really nice job investing and showing their willingness to invest in the technology to be able to support their business lending practices. Um, you know credit unions, I love going to credit union events, because they really take the time to collaborate and discuss what, you know, what is working for other credit unions, or, like, what other technology you know pieces are out there? So you know, I think they're really taking the initiative very seriously, investing in technology, investing in those lending teams, and then engaging with, as I said, the other credit unions on successes, failures, and what led you know, to them. I think lastly, I kind of ask myself, like, what's the main motivation behind all of these things? And it's a super simple answer, credit unions want to ensure that they offer the best experience for their members. So there was a recent survey of more than 72,000 Consumer Reports members, and 96% of them said that they were highly satisfied with the customer service that they received from their credit union. So I think, you know, they're highly satisfied, but are they having to look elsewhere, outside of you know, their primary Treasury relationship to have other products and services? So, you know, I think every discussion that I've really heard regarding technology is centered around the question, how can this technology help us better serve our members?

Sarah Cooke 06:34

Mm hmm, yeah, absolutely. Obviously, you know, that's a big, important thing. And recent consumer surveys have shown that credit unions have been slipping behind the, you know, behind the banks in customer service. So we really need to amp that back up in a digital way, because credit unions are great in person, and a lot of, you know, we're definitely making that progress, but keep on moving. Keep on moving forward. And you were talking about earlier how credit unions mostly fit within three camps in their business lendings. Can you explain more what you mean about that?

Sara Allen 07:10

Yeah, absolutely. So I do kind of put the buck, you know, put them in three different buckets. So when it comes to their their lending journey, their business lending journey, I think there's a pretty large bucket of credit unions that are still on that like planning, development, kind of seed stage. Some credit unions, or even branches of credit unions, haven't yet really implemented a business services or lending team, or they aren't also leveraging tools such as Vertical IQ and RelPro to help strategize most efficiently or effectively a launch, to be able to launch their business services and commercial lending divisions. So you know that strategy can really help entail, utilizing the industry research tools to narrow down a, you know, less risky industries within their regions and communities, and then leveraging prospecting solutions to be able to find, what is that total addressable market for businesses within, you know, a certain region or a radius around a given branch. I would put kind of the, the next bucket, kind of next stage of the process in that, like minimum viable product, like early stage. So, you know, credit unions have already said, like, Hey, we've gotta, we've got to diversify from just commercial real estate and consumer, so, you know, let's, let's look into more of the business lending, the CNI stage. So I would, yeah, I would put these kind of in, like, the early stage, where the credit union clients have really just launched their business services products, or they're building out this lending team, and they really have a need to size the market quickly. They've put a lot of investment here, so they need to kind of test with some of maybe their more loyal consumer, customers that are also small business owners, you know, offering up some extra incentives so that you can get their feedback. But, you know, letting them know it may be a little bit of a bumpy road, you're kind of part of a pilot. And then, you know, the, the next stage, I would say, just kind of down on, on down the path, is really that growth and maturity stage. And you know, whether they're growing their current commercial portfolio, or really targeting those commercial loans and or deposits. This could also be if a credit union is actively pursuing the CNI, you know, as I mentioned, as a way to diversify away from CRE and consumer lending, and when it comes to focusing more on CNI lending, credit unions will focus on targeting those industries within you know, manufacturing, consulting, professional services, industrial goods, and this will also help focus on gathering the data on companies, on outstanding commercial liens in their market, of which I've seen, you know, my clients be able to use RelPro for as they start pushing away from the CRE lending in particular. So in most parts of the country, that's really the goal is to have that more of a balance between the CNI and the commercial real estate.

Sarah Cooke 10:17
Mm hmm, yeah. Oh, I'm sorry. Go on.

Sara Allen 10:20
No, go ahead. I would say I'd love to tell you a story. So I was actually at a credit union event in

back in the spring, and Jon Taffer, do you know Jon Taffer from Bar Rescue?

Sarah Cooke 10:21 No.

Sara Allen 10:26

Okay, so you gotta look him up and watch Bar Rescue. But he's like, saving family businesses. And he is this, like, you know, like, big personality, and it seems like he's always yelling at you, and he's using his hands a lot, okay, so, and he's, like, he points a lot too, but he was the keynote speaker, and he goes through his, like, whole, you know, his like, he had like, five main bullet points, and he did a really nice job, you know, making a comparison to, you know, saving restaurants and bars and, like, how that also kind of plays into credit unions. Um, but then he kind of came to the end of his spill, and he was like, Well, I wasn't going to share this story, but I'm going to tell you anyway. He was like, I just recently went through a pretty major transaction, bought, bought something, bought a building or something. And he said, I went through the transaction. I did it with my, you know, my normal bank that I just usually go to, and after the fact, he said, my buddy came to me and was like, Why didn't you go to a credit union? He was like, a credit union? Like, why would I go to a credit union? And he was like, I mean, credit unions have lower loan interest rates and they're flexible lending terms, they've got higher savings rates and fewer fees. And he just, like, went on and on, and he was like, why don't I know this? And so he like, comes back to the audience, and he's like, you've got to do better. Like I am your target audience, why don't I know the advantages that a credit union offers? He was like, so you've got to do better. So I'd love to be able to partner with any credit union, to go find the Jon Taffers of the world to make sure that they know all of the amazing benefits that credit unions really offer.

Sarah Cooke 12:12

Yeah, yeah, absolutely. So, as a small business owner, yeah, I, my credit union didn't offer business services at all, so I had to go across the, across town to the community bank, and they've been great. But, yeah, I mean, it's certainly not for everybody, but certainly, but Business Services is something that credit unions are starting to get into. So if I am that credit union in that first or second stage of the process of getting into business lending, where do you go from there to reach that third phase?

Sara Allen 14:35

Yeah, absolutely. I think the biggest thing is really just being open minded and adopting new tools and technology such as RelPro to be able to create those targeted list of companies within the region, or, you know, the immediate, immediate community. I think the next thing would really be getting personal with your outreach. So it's not just a high velocity but making it really personalized. Um, many of the credit union clients you know understand that the businesses that they're reaching out to are more likely smaller in size, smaller to kind of medium sized businesses. And therefore it's really crucial to be personal in your outreach, understanding their industry, becoming that trusted advisor to them, and whether it's you know, using RelPro to create a map of companies that you're going to go visit, you know, in a given day, or, like, mapping out, you know, within five mile radius of the businesses around a branch. Or just sending out, like, very specific notes to companies based on the buyer intent signals as well, is, is a great thing to to be able to leverage. I think the other thing is, just like knowing what your sweet spot is. So I that's also another great thing about leveraging tools like RelPro, is to be able to develop a list that of prospects that's really narrowed down to target industries of target size, and the executives you know, to be able to call on at those companies. And then, I mean, of course, what credit unions already do best is leveraging those local events, you know, being out in the community, supporting their community. And you know, they also do a really nice job, I think, from a marketing and advertising standpoint too. It's just kind of changing, tweaking the message a little bit to, you know, more toward the business owners rather than just consumers.

Sarah Cooke 16:30

Mm, hmm, yeah. And what, there's a trend, it's politically huge. It's kind of a smallish trend of growing is that credit unions are buying banks, often to get their business lending experience and technologies and the things that they don't have. So does RelPro do that kind of work as well?

Sara Allen 16:53

Yeah, it is a really interesting trend. And I think that the credit unions are buying up the banks for, you know, a number of reasons. Obviously, kind of the the tax benefits. So, you know, credit unions are tax, tax exempt, so the assets that they require, acquire from the banks become tax exempt as well. And this really gives credit unions an advantage over the banks when evaluating those acquisition targets, and allows them to, you know, probably be able to pay a little bit more for, you know, the technology and services that that bank already offers. You know, the regulatory advantages, so a little fewer regulations, requirements than banks. So I would expect probably that to, you know, to, to change as this trend potentially continues to grow. So, you know, not being subject to the Community Reinvestment Act. But I think, as we talked about earlier, still being, you know, sure to include the MBE and DBE data within the communities is still, you know, always going to be a big focus. You know, I think the balance sheet benefits as well. So banks have been focusing on CNI for years. I mean, you mentioned like going across the street to, to be able to get the business products that you needed. So acquiring these banks can be kind of a, you know, an instant way to diversify the credit union's loan portfolio, to be able to reduce that, that concentration risk. Also can lessen the interest rate risk also, and by adding those loans and that you can really reprice more frequently. The geographic expansion is, you know, is another big thing. So I think acquiring the banks really allows the credit unions to expand their geographic footprint. And it's really more sophisticated credit unions that are increasingly competing directly with those traditional banks by expanding their services offerings and market outreach. And then I think, last thing I would just say is really that, like product diversification, which kind of goes back into everything. So you know, these acquiring banks have really allowed the credit unions to offer the wide range of products and services that the small business owners are asking for. So it's giving them that better technology, with the security and the personalization and, you know, desirable deposit and loan rates that the credit unions really are already offering.

Sarah Cooke 25:18
Alrighty. So Sara, as you know, we allow our guests a final thought to close out the show. What have you got to say for our credit union audience?

Sara Allen 25:29

Yeah, credit unions are proud, and really should be of the reputation that they have built as community focused financial institutions that perform such an integral role in the local economies. Many credit unions are looking to make you know a greater impact by expanding and diversifying you know into their business lending practices around you know, commercial and industrial lending space, and I think the ability to efficiently leverage the industry insights and company and contact intelligence to support those vending, business lending initiatives is really going to be game changer. So RelPro can give you access to the data no matter the size of your institution, um, whether it's one person on your lending team or 25 we can help you scale that so thank you so much for having us here today. I appreciate it too.

Sarah Cooke 26:26
Thank you. Sara.