Understanding & Serving the New Global Banking Member

Credit unions have long been a lifeline to small businesses and families, providing support and funding when other financial institutions were focused on larger clients. Throughout their long history, this position has remained unchanged. The nature of the country, however, has not.

For much of their existence, these institutions served nearby companies and families in their local neighborhoods. This practice helped make these credit unions an integral part of their communities. While this is still true, members are becoming increasingly international. Though global transactions are traditionally associated with large corporations, more and more it is small organizations and families that have international connections.

Which Members Have an International Connection?

The most obvious example of international business is exports, which distribute U.S.-based products and services to global consumers. The majority of exporters – a whopping 97% – are classified as small companies with less than 500 employees, according to the U.S. Small Business Administration (SBA). Beyond that industry, many small and medium-sized enterprises (SMEs) are also expanding their target markets, product sourcing and employee base across the globe.

For personal members, the numbers are just as large. Millions of families send money abroad to relatives and friends, about a third of which transact at least 10 times per yea5, according to the U.S. Census Bureau. In fact, Pew Research found, prior to the pandemic, millions of Americans traveled international every single month. The strong U.S. dollar coupled with affordable options have long made it increasingly easy for Americans to leave the country.

Why Members Are Becoming Globalized

Between the financial crisis and the COVID-19 pandemic, the 2000s have not been an easy time for many, let alone small businesses or average families. Coupled with the rise of ecommerce and globalization, locals are turning to international options as more of a necessity and less of an opportunity. According to the SBA, expanding globally helps smaller organizations weather challenging times, reduce seasonality and increase profits. Retiring, studying and even seeking medical care internationally is also rising in popularity.

International Trends: An Advantage for Credit Unions

It’s important for financial institutions to fully grasp just how prevalent international ties are in the local economy. Nearly one in six Americans currently work for a company engaged in global commerce, Forbes reported, and international imports have steadily risen every year including during the pandemic, according to U.S. Customs and Border Protection. Also growing is the number of immigrants, as nearly 45 million citizens are foreign-born, Pew Research found, a trend that continues to climb. This presents an enormous opportunity for credit unions as they serve as trusted financial partners and consultants, rather than simply providers. In fact, strong member service and a high level of personalized support has set these financial institutions apart from larger competitors.

Here are some actions credit unions should take today:

1. Spread awareness: A globalized approach to business is often considered negative as overseas operations are thought to displace U.S. jobs. However, the reality is much more complicated, and experts revealed that international ties are key to remaining competitive in today’s economy as well as growing.

2. Facilitate transactions: Nearly half of all U.S.-based SMEs conduct business in 11 or more countries, according to the U.S. Chamber of Commerce. Similarly, the U.S. sends and receives billions of dollars through small personal transactions between families every year. Financial institutions should be able to serve their needs by allowing for transactions in a variety of currencies.

3. Provide support: As the pandemic continues to challenge people across the country, it’s more important than ever to support members. International connections make it easier for both families and entrepreneurs to thrive during this difficult time and financial institutions could see an increase in international transactions as COVID-19 recovery continues.

What’s Next for Members?

The globalized economy shows no sign of slowing down. In fact, varied pandemic recovery rates underscore the importance of an international approach for all Americans. It is past time for credit unions to acknowledge this trend and support customers accordingly. In fact, because smaller financial institutions are uniquely positioned as trustworthy providers, they are in a strong position to benefit from this international shift.

Stephen Kuhl, Managing Director, Financial Institutions and Strategic Partnerships for Western Union Business Solutions in Denver.