July 20, 2012


Comments

 
 
 
  • I agree with Bill, it depends on your business model, as well as business culture. Managed Services vs. In-House services is a potential area. In some cases, we've been able to show a 50% reduction for our customers in the Managed Network Security Services model. However, this, much like "cloud" services, is still a cultural and philosophical hurdle than a technical hurdle.
    Ken McCutchen
     
     
     
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  • How good the efficiency ratio is at measuring operating efficiency depends on what your business model is, and on if you are growing or not.

    I was just banged on the head for having a high expense to asset ratio. Since we are growing, and need assets in place to meet future needs, that's true, but our efficiency ratio tells how well we turn the dollars we spend into income, and that is very low, comparatively.
    Bill Wade
     
     
     
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  • David- I agree that high "giveback" CUs will have worse efficiency ratios, but one must keep in mind the Operating Expense to Assets ratio can also be skewed. (For example, in this current environment of double digit asset growth.) Looking at both ratios while understanding what is really driving those numbers is the balance I try to take.
    Mike Brandt
     
     
     
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  • Efficiency Ratio is not a good measure of operating efficiency in credit unions. Most credit unions provide a return to members "above the line", in the form of higher rates on deposits, lower rates on loans and lower fees, thereby reducing reported revenue. All things equal, high "giveback" credit unions will report higher (worse) Efficiency Ratio's. A better measure of credit union efficiency is Operating Expense/Assets.
    David Mooney
     
     
     
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