By every measure, mid-year performance data shows credit unions are increasing their relationships with members. Loan originations in the first six months of 2015 crossed the $200 billion mark for the first time ever. Membership topped 100 million, and those members have entrusted nearly $1 trillion in savings to their credit union. Members are using credit union products to a greater extent, thus expanding the value of their relationships. Market share is rising in key business lines, and strong financials have enabled the industry to make additional investments in member value.
Second quarter performance continues the growth credit unions have posted since the recession, and credit union leadership teams are using this year’s planning season to determine how to continue building on their success. The biggest challenge for many teams today? Setting their ambitions high enough.
The industry’s local focus — as defined by geography or affiliation — combined with its cooperative values is resonating with consumers and community leaders. And with credit unions’ newfound visibility comes new opportunities. How can credit unions leverage this environment to take their organizations to another level? It’s time for leadership teams to think not in terms of incremental growth but rather about initiatives that will deliver exponential growth.
Second quarter performance continues the growth credit unions have posted since the recession, and credit union leadership teams are using this year’s planning season to determine how to continue building on their success.
New Members, New Products
Some credit unions are starting with membership potential and studying expansions into new markets. There are opportunities in affiliations with large companies and organizations that have been overlooked or seen as too big to serve in the past. Credit unions can now leverage their local presence as well as cooperative convenience provided by shared ATM and branch networks to go after these companies. With unprecedented investment in mobile technology and self-service tools, credit unions of any size can meet the demands of consumers of all ages and demographics.
Beyond new membership opportunities, credit unions are pushing into new products and services. Real estate lending is fertile ground for credit unions willing to work with members. After all, that’s a major point of differentiation from other providers. Credit unions’ national share of first mortgage originations hit 8.5% as of June 30, 2015. That’s a midyear high that shows more consumers are turning to credit unions for home purchases and refinances.
First-time homebuyer programs are becoming a key component of many mortgage portfolios. Credit unions are helping younger borrowers achieve home ownership with creative products that incorporate savings accounts or established co-borrowers. And with increasing home values fueling a rise in home equity lending, some credit unions are again linking first mortgages with home equity loans to help members meet their financing needs and gain home ownership.
But perhaps the greatest opportunity for credit unions lies in pursuing initiatives that fulfill the social mission that forms the foundation of the industry. Even in today’s environment of new highs and upward trends, credit unions still recognize the challenge many Americans face in managing money. In response, they are launching solutions that incent savings, provide affordable short-term credit, and teach financial management. Such initiatives are not only important to those living paycheck-to-paycheck or burdened by debt but also reinforce the credit union difference to the community at large.
Expanding Skill Sets
In addition to new memberships, products, and services, credit unions are investing in internal growth. New roles are helping credit unions more effectively reach members and deepen relationships. Business development positions — focused on maximizing existing SEG relationships and identifying new affiliation opportunities — spread the word about the benefits of credit union membership. Often, these roles also serve as community and member liaisons. As such, they are frequently arranging financial education courses in public venues or SEG sites.
HISTORCAL SHARE BALANCES
For all U.S. credit unions | Data as of 06.30.15
© Callahan & Associates | www.creditunions.com
Share balances neared $1 trillion as members directed more savings to credit unions.
With an eye toward efficiency in marketing, credit unions are also employing data analysts to aggregate and filter member data from multiple databases. This use of data goes a long way in helping credit unions better anticipate and target member needs.
Finally, credit unions are directing more resources to developing the next generation of leaders. As credit unions attract more employees from outside the industry, emphasizing credit union culture is often an important element of this process. Although training for technical skills is still important, credit unions are investing time and money in mentoring and coaching programs that provide one-on-one interactions to help refine leadership skills in both emerging and established executives.
As the industry’s influence reaches new levels, now is the time for credit union leaders to help their teams recognize what opportunities are available and guide them forward. This will be a shift from traditional thinking for many employees, but if there was ever a time to think big, it is now.