International Payments | Articles
The growth of high-net-worth customers in community banks and credit unions
How targeting this group could help your institution expand
While credit unions and community banks are often associated with small businesses and local families, higher net worth individuals and growth companies actually have a long history with these financial institutions. In fact, many have their own brand of private banking or wealth management for individuals and larger companies. Because these types of institutions have a deeper understanding of personalized service and unique needs, the match actually makes complete sense.
Though some institutions may scoff at catering to this type of clientele, there are reasons to consider it. Firstly, while private banking or wealth management may seem like an option for the ultra rich, it doesn’t have to be. For most, it is simply a method of managing money that is more complex than average. For example, a growing professional with multiple service needs, a senior interested in estate planning or a small business with overseas importing are just a few types of customers who may consider high net worth banking and a community bank or credit union. The major difference is that the complexity of their issues make it more likely they will require a bespoke style service. On the business side of banking, today’s entrepreneurs are just as likely to serve customers down the street as they are to reach someone across the globe. These types of international transactions can also require a different approach than everyday banking.
It may surprise even seasoned bankers to see just how much of a growing and important sector this is across North America. But how does an institution even begin to target this group?
- Retain & grow with your customers: It is unfortunate, but some business or personal customers leave their banking brand after a certain financial threshold because they assume, they require a big bank for their higher net worth needs. Assure your customers this is not true and apply your personalized, unique approach to their new situations. Afterall, a major selling point of high-income banking is above all a one-on-one relationship. Small institutions have already perfected this tactic.
- The right products: It goes without saying that higher net worth customers frequently require different products and services compared to an average middle-income earner. As an example, this type of client often prefers to manage their business and personal finances from a global perspective. It is common to have links to another country for product sourcing, holding property and more. As a result, it’s important your financial institution can provide requisite international payment services.
- Efficiency: This could be the most important factor for these customers. They are likely incredibly busy and are used to working on their own schedule. This can make visiting your branch for a general transaction difficult, especially since many smaller institutions have limited hours. It is best to boost your online presence and make common services easily available, no matter the hour.
- The digital alternative: Many credit unions and community banks offer innovative products but limit their use and require an in-person visit. This is particularly true for those that allow international payments. Because those dealing in multiple countries may have to adapt to their time zone, it makes digital alternatives more of a necessity. If your branch offers international payment services, make sure there’s an option for online or mobile transactions.
- White glove service: This should be easy for most community institutions. When big banks try and attract new high net worth clientele, this is one of their key offerings. Those with significant assets may have less time and patience for an inconsistent customer experience. Luckily, credit unions and community banks are typically celebrated for their outstanding customer service levels. If this is combined with addressing the unique financial needs of this new group, it could be a winning combination for any institution.
With new digital banking options and apps cropping up all the time, it is more important than ever for local credit unions and community banks to consider every type of client. The already established style of “community centric” financial institutions, with their individualized approach and commitment, is a perfect fit to service the high net worth segment. International capabilities to compliment existing domestic services, combined with competent digital access and personalized service will position your financial institution for success.
About Western Union Business Solutions
Western Union Business Solutions is a global leader in foreign exchange services and international payment enablement for credit unions and community banks. Our financial strength, technology and experience help facilitate new revenue opportunities for over 1,800 financial institutions globally. With hassle-free implementation, we offer a world-class, 24/7 digital platform where customers can send and receive foreign funds with only a few clicks. Each institution is offered a customized solution and dedicated support, with access to payments in over 130 currencies in more than 200 countries/territories. This simple, white-labeled addition can add not only a new revenue stream to any institution but also a way to help increase customer satisfaction and attract new business.