Credit unions are better known for consumer relationships than their small business banking portfolios. A product designed by financial technology provider Nymbus and
On Tuesday, the two entities announced Nymbus SMB, a package of business banking products aimed at credit unions and community banks that include invoicing, cash management tools, cash flow analytics, a digital banking platform and what Nymbus calls concierge onboarding, or dedicated resources that assist with the more-complex tasks of opening business accounts compared with starting consumer relationships.
"Think about it as an entire standalone bank technology stack that is purpose-built to serve the SMB [small and midsize business] community," Jeffery Kendall, CEO of Nymbus, said in an interview. "It's not simply a set of plug-ins that go into a credit union's digital banking experience. It is a parallel tech stack, built to stand up alongside but not integrated with the existing technology architecture of the bank or credit union. The whole idea is to allow [financial institutions] to get into the SMB market faster without disrupting the business-as-usual state at the credit union."
Credit unions have, in general, ventured into the small-business space to a lesser degree than banks.
"It's historically been a missed opportunity," said Ian Benton, senior analyst in digital banking at Javelin Strategy & Research, in an interview. Now, "a lot of credit unions finally see the ability to jump into small business because they see a lot of their members are going down the street to Chase when they start a business instead of looking to the credit union first."
Christine Barry, head of banking and payments insights and advisory at Datos Insights, agrees.
"Over the last several years, we have seen most credit unions striving to grow their penetration in the small business space," she said via email. "The small-business segment is not only large in number, but it also offers strong potential for fee-based revenue, which both banks and credit unions are seeking. Most banks and credit unions consider increasing their success with small businesses to be critical to their overall success."
Nymbus and
"When MSUFCU noted that small business was our next focus, the collaboration started," said Sara Dolan, the chief financial officer of the $7.7 billion-asset credit union, via email.
Michigan State University Federal Credit Union will open five branches in the Windy City to serve the more than 10,000 members and potential members living there. This marks the first time that the institution has expanded beyond its home state.
Nymbus already had building blocks in place.
"We've had a lot of experience building for the SMB community," said Kendall, citing Nymbus's
The bundle of tools is the differentiator for MSUFCU.
"Putting small business services in a single digital platform creates a more cohesive experience for our members," said Dolan.
MSUFCU provided the subject matter expertise for this project and is Nymbus SMB's first client. MSUFCU also invested in Nymbus's Series D funding round in May, which raised $70 million.
"We are looking to enhance the digital experience for business members," said Dolan. "This is where Nymbus comes in: to offer a more robust, streamlined experience which allows small businesses to manage their accounts with more self-service options than we offer today."
Benton has observed a number of business banking technology providers recognize that the credit union space is underserved. That may help turn the tide for credit unions, which have typically prioritized consumer banking needs that arise from the affinity groups they serve.
Moreover, Benton notes that it is increasingly important for financial institutions to specialize in segments or industries of small business banking.
"Building that internal capability and expertise takes some investment," he said.
