Credit Unions Continue Technology Investments Despite Uncertain Environment

Callahan’s 2009 Technology Survey indicates credit unions continue to invest in applications that enhance both member service and operating efficiency.


Callahan's 2009 Technology Survey indicates credit unions continue to invest in applications that enhance both member service and operating efficiency. These investments are occurring despite an increased focus on expense management due to the uncertain economic environment and NCUA's corporate credit union assessment.

How Much Are Credit Unions Budgeting for Technology Expenditures in 2009?

The sixth annual survey was launched by Callahan & Associates in March to gauge credit union technology budget plans, investment priorities, and insights. The median amount budgeted by credit union respondents for technology expenditures in 2009 is between $250,000 and $500,000. This budget encompasses software, hardware, external consulting, program installation, security and communication expenditures.

While the average asset size of the credit union increases with the size of the budget, a wide range of asset sizes are represented in each budget category. The widest range is in the $500,000 to $1 million budget category, which includes credit unions from $164 million to over $1 billion in assets, an eightfold difference between largest and smallest. The smallest credit union in this group reported investments in Check 21 technology to be its most significant tech expense in 2009.

Are Credit Unions Spending More or Less on Technology in 2009?

Despite an increased focus on expense management in many credit unions, investments continue to be
made in technology. Fifty-six percent of respondents indicated their credit union's technology budget will increase in 2009 from a year ago, while sixteen percent are maintaining their 2009 budget at 2008 levels. Twenty-eight percent indicated there would be a year-over-year decline. The year-over-year budget dynamics vary across all asset sizes.

With the majority of respondents reporting an increase in their technology budget, it seems credit unions continue to take the long view with regards to these investments. However, the percentage reporting a lower year-over-year technology budget is up from prior years’ surveys, reflecting heightened expense focus in the current environment.

What Percent of Total Operating Expenses are Technology-Related?

Technology-related expenses account for between 5% and 10% of total operating expenses in the median credit union repondent. Forty-two percent of respondents reported falling within this range, similar to results seen in prior years' surveys. This measure is not influenced by asset size, with a wide range of sizes reported in each category. Based on this data, a reasonable estimate of the average credit union technology budget is between 8 and 10 percent of total operating expenses. Measuring this percentage against industry totals indicates credit unions will spend between $2.2 and $2.8 billion on technology in 2009.

To learn how credit unions are prioritizing and developing their technology needs for 2010, attend Callahan's technology roundtable on Choosing Technology Initiatives Wisely in Uncertain Times. Callahan's 2009 Technology Guide provides information regarding credit union technology options and insight into best practices for technology adoption.




May 25, 2009


  • What is the asset size range of the participants in the Technology Survey? What is number of credit union respondents in each asset size range?

    Karen Coble
  • A total of 92 credit unions representing over $37 billion in assets responded to this year’s survey. Respondents ranged from $6 million to $4 billion in assets.
    Jay Johnson
  • We will be sharing more data from the survey in an article next week that will show the top priorities identified by the respondents as a whole. The complete survey is included in Callahan's 2009 Technology Guide.
    Jay Johnson
  • You state that the smallest credit union reported Check 21 would be its most significant tech expense. What about he overall group? How did expected investments break down between security, business continuity, core systems, etc.?