Improve Benchmarking Through Peer Group Analysis

Analyzing credit union performance against segmented peer groups can improve benchmarking. Examine electronically-offered financial services across nine peer groups

 
 

Analyzing credit union performance against segmented peer groups can improve benchmarking. While broad industry averages can help in tracking large-scale trends, at times the comparison can be misleading for evaluating individual credit union performance. For example, while overall membership growth was 1.7 percent last year, over half of all credit unions reported a decline in membership. Almost all of this gain is attributed to growth in 609 credit unions.

An important and popular method for benchmarking credit union performance is to segment into peer groups by asset size. The graph to the left illustrates the breakdown of nine peer groups Callahan uses for data analysis.

Asset-based comparisons equalize the operational, management and resource capabilities. While a number of external factors can influence performance, relevant comparisons for a reality check should start with asset size.

The chart below breaks down the financial services offered electronically by peer group using 5300 call report data. Due to the upfront investment in technology, adoption rates vary dramatically by peer group. While some questions on the 5300 call report result in different interpretations, the trends amongst the peer groups are clear. Analyzing data both by peer group and for the industry at large can help credit unions to understand where opportunities for growth or improvement lie.

For example, only 10 percent of credit unions in the $2-5 million asset peer group offer members the ability to view account history. In comparison, more than 97 percent of credit unions over $1 billion in assets offer this service. The differences across peer groups for bill payment, online member applications, and Internet access services are equally dramatic.

To access additional peer group comparison data, consult the 2005 Credit Union Directory.

Financial Services offered Electronically by Peer Group
Data as of June 30, 2004  
  Under $2 million $2-5 million $5-10 million $10-20 million $20-50 million $50-100 million $100-250 million $250 mil - $1 bil  Over $1 billion
View Account History 1.29% 10.90% 26.00% 51.42% 75.06% 91.66% 93.95% 98.58% 97.78%
Bill Payment 0.23% 3.31% 7.34% 17.85% 38.05% 60.98% 78.37% 93.40% 97.78%
Member Application 0.82% 3.46% 9.64% 20.96% 33.12% 42.82% 50.53% 59.43% 70.00%
Internet Access Services 0.29% 2.03% 6.92% 11.33% 17.21% 17.79% 16.94% 19.58% 22.22%
Share Draft Orders 0.59% 10.30% 28.23% 52.76% 72.79% 84.66% 86.69% 91.75% 92.22%
New Loan 0.76% 4.06% 11.25% 28.54% 48.44% 71.78% 82.30% 89.86% 94.44%
Audio Response
/Phone Based
2.29% 11.50% 33.40% 60.76% 82.66% 94.48% 97.28% 97.88% 98.89%
Home Banking via Internet Website 1.35% 9.32% 20.48% 43.84% 69.87% 87.73% 93.65% 97.41% 97.78%
 
Source: 5300 Call Report Data
                   

 

 

 

Nov. 8, 2004


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