With 2012 officially in the books and the future square in your sights, now is a good time to take pause, reflect on how far your credit union has come, take inventory of where you are today and, most importantly, strategically plan where you’re going. Success at your credit union doesn’t just happen naturally. The most successful credit unions have been deliberate in their goals and subsequent actions, putting their missions first.
This idea of putting missions first was captured beautifully in the simple message of this year’s International Credit Union Day — “Members Matter Most.” Keeping this message in mind will help you stay true to your course, despite the inevitable distractions. As Brian Branch, president and CEO of the World Council of Credit Unions, summarized, “In the face of all challenges, credit unions have always existed to serve their members. The clear and simple message ‘Members Matter Most’ summarizes credit unions’ reason for being.”
During 2012, new members continued to flock to credit unions. In March, credit union assets hit the $1 trillion mark for the first time in history. With credit unions touting the Members Matter Most philosophy, by the time the first anniversary of Bank Transfer Day rolled around on November 5, statistics showed that 664,000 consumers had joined credit unions, many searching for this philosophy in action.
Be Ready — For Disasters, Threats, and … Opportunities
Mother Nature: Super Storm Sandy was a reminder to credit unions across the country that disaster recovery planning is critical if your members matter most. While such natural disasters can’t be controlled, and operations will inevitably be impacted, make sure you’re in the best position to help your members rather than inflicting further stress by not having appropriate plans in place.
The Fiscal Cliff: The constant threat of taxation continues to weigh on credit union executives’ minds. When a Congressional plan was revealed late in 2012 that included removing the exemption, it was a harsh reminder how real the threat could be. Even after Congress and the President reached a deal on taxes in January 2013, government revenues remain a significant issue in ongoing budget and spending policy talks. Taxation matters to members, as it would result in fewer returns to members and decreased capital, potentially weakening their credit unions.
Regulation: While new laws and regulations continue to make it more difficult and costly to do business as a credit union, keep in mind that their purpose is to ultimately protect your members. Use new regulations to educate your members and further help them realize the benefits of being a member of your credit union. 2012 saw some helpful regulations as well. Increasing the opportunities to obtain low-income designation will benefit credit unions, as will the revised TDR reporting rules.
Technology: On the technology front, nothing seemed to garner as much attention in 2012 as mobile banking. This is yet another area that falls in line with the Members Matter Most philosophy. Contrast this deployment of credit union capital with spending your technology budget year after year on internal systems for the benefit of staff; which represents a better value return to your members?
Stay Focused … and Innovate
If Members Matter Most at your credit union, is it reflected in the new products you develop? Are most of your new products still focused on the lending side of the financial relationship? While loans are critical for keeping your income stable, there should also be a focus on new products for savers. Additionally, have you examined your fee structure lately? Do your fees seem more punitive or reflective of payment for value-added services?
In marketing to potential new members, the opportunities still appear to be significant. The Federal Reserve Board released a study in which it estimated 11 percent of the U.S. adult population is unbanked, and another 11 percent is underbanked. While this does present an opportunity, it might not be in the way you’d initially think. Many of these people are comfortable without a traditional banking relationship. So, what can you do to provide value to this demographic? They aren’t looking for traditional loans or deposit accounts. Innovate, and think outside the box. According to another study conducted by CUNA, there are more than 20 million nonmembers younger than age 18 living in members’ households. If these potential members matter, what are you doing to draw them into your credit union and assist in their financial development?
Meeting the Challenge
If the Members Matter Most philosophy stays alive and relevant, the credit union industry will continue to thrive. Distractions and challenges will continue to surface, but the mission will remain strong. Throughout this publication, we’ve shared thoughts and ideas relevant to credit unions and how you can help your members. 2013 will be an exciting year in the industry, and the prospect of connecting with members in even more meaningful ways will make this a year to remember.