Question

Build a business model that characterizes the customer's (Credit Union Bank) offerings in the market specifying the products and services. A business model should include but not limited to what products and/or services the company is going to offer, how it is going to offer them, which public it is going to target, how their product will be sold and how to obtain income. Customer is a Credit Union Bank

Answer 1

There is no pre detrained formula to make money or to make good profit. The good profit or a successful business is the result of doing small thing in right way.

Smart business man will do SWAT analysis before taking any decision, he knows his business strength weakness and also he know that how to overcome from those weakness.

Here you go for a business module for your customer (Credit union Bank),

Fee Drives Profits

Investment

High Margin/Low Leverage

Loans Drive Profits

High Leverage

  

Fee Drives Profits: Insurance and payment schemes are fall in to this category. Usually everywhere we can find the fixed charges and fixed income, this business model usually exhibits the smallest volatility of earnings.

Investment: here in this module the bank or a business should offer some of investments shceem like Auto, home equity, utility receivables, insurance premium financing, leasing, and other similar asset classes are just some of the ways that community banks execute on this business model.

High Margin/Low Leverage: In this module we can make the investment diversity or portfolio investment. Like collect deposit, pay lower interest. Issue loans charge higher interest so on. Liquidity is usually kept high as a counterbalance to credit and these banks usually have a developed credit model to allow for both credit and marketing/sales arbitrage.

Loans Drive Profits: This is the most popular category for for this business module for example the U.S. banks are characterized by high net interest income and high gross loans to total assets.

With this module we can collect the good deposit from the customers.

Having a good understanding of what business model or mix of business models you are employing help you better set strategic direction and gives you a clearer picture of your risk.