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How does YTD operating expense per member differ by peer groups?
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Open Your Books To Drive Better Results
October 25, 2010
The table is what it is: an industry leader table.
Both reader comments illustrate exactly why we encourage credit unions to create very customized peer groups for analysis instead of broad industry or even national asset-based groups as used often by examiners, etc. Not meaningless, just not a very telling single lens to evaluate performance.
We call it strategic benchmarking and it is why we created our Peer to Peer credit union analysis software for credit unions over a decade ago. There are a range of ways CU executives use Peer – from stakeholder/staff reporting to identifying best practice to properly framing performance with the examiner.
Strategic benchmarking is about creating different peer groups based on credit unions that have a similar loan composition, similar FOM foundation, similar geographic/economic trends, similar retail delivery expense strategy (# of branches or employees to member, etc). There is no one "right" way to benchmark and gauge performance success/opportunities but having multiple lenses is far better than burring your head in the sand or relying solely on macro indicators. There are countless peer group possibilities.
Hope this helps some. The leader table here is food for thought. Definitely helpful to understand and I guarantee there are relevant business model stories within some of these CU that are applicable to most CUs. But, no argument, it is even more helpful to compare your own performance to your own peers.
Scott Patterson (Callahan)
While I don't put a great deal of emphasis on peer assessments due to the different business models for different credit unions, I do try to understand those differences and learn from areas where we are similar or where their uniqueness is something I can use. To dismiss the value of studying them because they are "very, very unique" (a pretty blanket statement - what's your supporting info?) suggests that someone is missing an opportunity to improve.
These credit unions are very very unique and specialized and its a waste of time to try and understand and learn from them.
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Industry Performance By The Numbers (3Q ...
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