Credit unions are facing a quiet crisis. The 2025 Jack Henry Strategy Benchmark shows that 80% of financial institutions plan to expand small business services this year. But here’s the problem: they’re already too late for most new businesses.
The numbers are brutal. 87% of new LLC formations never see a credit union offer. These entrepreneurs default to national banks before anyone at the local branch even knows they exist.
Better rates won’t fix this. Neither will friendlier service. The real solution is embedded accounting.
When your digital banking app handles business formation, taxes, and bookkeeping automatically, you don’t just win a transaction. You win the primary operating account. And that relationship lasts an average of seven years.
Below is an analysis of five platforms helping credit unions reclaim this market in 2025.
The Invisible Leakage Problem
Before diving into solutions, let’s understand what credit unions are actually losing.
The Federal Reserve Small Business Credit Survey reveals a massive gap between member needs and credit union capabilities:
The side hustle economy is exploding. Roughly 25% of your retail members are running businesses through personal accounts right now. This is untapped revenue hiding in your existing member base.
Small businesses feel ignored. There are 33.2 million small businesses in the US. Two thirds of them say their primary bank doesn’t understand their workflow or needs.
Everyone knows tech is the answer. 94% of financial institutions plan to embed fintech into their digital banking. But most are moving too slowly to capture new business formations.
Barry Kirby, CRO at Union Credit, put it bluntly in CUInsight: “Credit unions often struggle to stay top-of-mind. To remain relevant, they need to meet consumers where they are, not wait for them to walk into a branch.”
The goal is simple: make financial management invisible. These platforms do exactly that.
Top 5 Embedded Accounting Solutions for 2025
1. Jupid: The AI-Native Growth Engine
Best for: Credit unions that want to capture entrepreneurs at the exact moment of business creation.
Jupid isn’t another bookkeeping tool. It’s a business formation engine. While competitors focus on digitizing old workflows, Jupid uses AI to eliminate the workflow entirely.
What makes it different:
It solves the acquisition problem, not just retention. Jupid lets members incorporate their LLC for free directly through the credit union. This converts that 25% of hidden business owners into business banking clients before they ever think about going to a national bank.
There’s no dashboard to learn. Members chat with an AI accountant through WhatsApp, iMessage, or the banking app itself. The system achieves 95.9% accuracy in transaction categorization and handles tax compliance automatically.
The economics work for credit unions too. Because it’s embedded as a free value-add service, the cost of acquiring a new business depositor drops to nearly zero.
Integration: Native support for Banno, Q2, and Alchemy platforms, covering 3,000+ financial institutions.
2. Autobooks: The Invoicing Veteran
Best for: Credit unions focused on payment acceptance and basic receivables.
Autobooks has built solid partnerships across the industry. Its primary strength is helping small businesses get paid faster.
Core features include: digital invoicing sent directly from the banking app, payment link generation, and basic cash flow dashboards.
The trade-off: Autobooks handles payments well, but it requires manual effort for accounting. Users still need to log in, categorize transactions, and manage the books themselves. It lacks the autopilot nature of AI-native platforms.
3. Q2 Innovation Studio: The Infrastructure Play
Best for: Credit unions undergoing a complete digital transformation.
Q2 isn’t a tool. It’s an ecosystem. Their Innovation Studio lets credit unions build custom digital experiences by connecting various fintech modules.
Core features include: enterprise-grade security, a marketplace of pre-integrated fintechs, and deep API customization.
The trade-off: It’s a heavy lift. Q2 provides the tracks, but you often need to bring the train. Specific accounting tasks typically require third-party apps on top of the platform.
4. Jack Henry Banno: The Ecosystem Choice
Best for: Credit unions already running on Jack Henry core systems.
If you’re a Jack Henry shop, Banno offers the path of least resistance. Their 2025 strategy focuses heavily on SMB tools with tight data synchronization.
Core features include: unified experience for retail and business members, FedNow real-time payments support, and SMB dashboards built into the core.
The trade-off: Innovation speed depends on the core provider’s roadmap. It’s a safe, stable choice, but rarely a market disruptor.
5. Narmi: The UX Specialist
Best for: Credit unions prioritizing fast account opening.
Narmi is famous for its interface. They focus on making the digital door as wide as possible with modern, clean design.
Core features include: sub-3-minute digital account opening, mobile-first design, and visual analytics for business health.
The trade-off: Narmi excels at the front end but offers less depth in back-office functions like tax compliance and automated bookkeeping.
Old Way vs New Way: A Strategic Comparison
The market has split into two camps: workflow digitization and AI automation.
Feature Jupid Auto booksQ2/Banno Primary goal New business acquisition Payment collection Digital banking hub User interface Conversational AI chat Traditional dashboard Banking app modules LLC formation Built-in and free Not available Not available Automation level High (95.9% auto-categorized) Low (manual entry) Varies by integration Target user The accidental entrepreneur Established merchant General SMB
The fundamental question: are you trying to serve existing business members better, or capture new ones?
How to Choose
If your goal is modernizing payments for merchants you already have, Autobooks is a proven choice.
If your goal is capturing new market share and stopping deposit leakage to national banks at the moment of business formation, Jupid offers the strongest competitive position in 2025.
If you need full infrastructure transformation, Q2 provides the foundation, though you’ll need to add specialized tools on top.
If you’re already on Jack Henry, Banno is the natural extension with minimal integration friction.
The Bottom Line
The window to secure the next generation of business owners is closing. 48% of fintechs now partner with credit unions, up from 40% just last year. The technology exists. The member demand is there.
The only remaining question is whether your credit union will offer these tools, or whether your members will find them somewhere else.
Sources:
- Jack Henry 2025 Strategy Benchmark
- Federal Reserve 2025 Small Business Credit Survey
- CUInsight: “3 Ways Credit Unions Can Win in 2025” by Barry Kirby
- PYMNTS Research: Fintech-Credit Union Partnership Study
