Credit unions that want to learn about industry best practices or review analysis of quarterly performance data turn to Callahan & Associates. Suppliers that want to learn how to best serve their credit union clients turn to Callahan & Associates, too.
Callahan presented its 2016 Suppliers’ Webinar on Friday, Feb. 19. This annual event occurs prior to the kickoff of CUNA’s Governmental Affairs Conference and provides credit union vendors an update of the industry’s financial landscape so they can have more substantial conversations with credit union executives and board members.
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Here are three takeaways from webinar.
No. 1: Callahan Has 6 Big Ideas For 2016
Callahan’s first presenter, partner Alix Patterson, discussed Callahan’s “6 Big Ideas For 2016.” These ideas include:
“Leadership development, financial wellness, cybersecurity, and embracing disruption work together to help credit unions build relevance,” Patterson says. “And we feel that collaboration is strategically important for our industry.”
Read more about Callahan's ideas in, "6 Big Ideas For 2016."
No. 2: Benchmarking For Success
Sam Taft, Callahan’s director of industry analysis, asked a simple question: What is benchmarking and why is it important?
“Benchmarking is the first step toward better understanding your client and what next steps they might want to consider,” Taft says. Credit unions can use benchmarking to highlight market trends, confirm or disprove assumptions, and provide actionable information for their team.
Taft then suggested suppliers use different benchmarking metrics based on organizational role.
“There are advantages to be gained and insights to be gleaned in nearly every department of a credit union,” he says. “It’s not just for the c-suite and the CFO anymore.”
Some general areas of benchmarking Taft suggests are growth metrics, product penetration rates, earnings, productivity, efficiency, and activity.
Taft also identified pitfalls to avoid, as benchmarking errors can give a faulty view of credit union performance. For example, errors commonly occur during the selection of a peer group. Size, product offerings, and business model are important characteristics to consider when choosing the institutions that comprise a peer group. Additionally, suppliers should consider how frequently they are benchmarking their clients’ performance.
“A snapshot can be illustrative of an institution at a point-in-time,” he says. “But in general, it will be more impactful to look at that metric over a period of time on a comparative basis.”
No. 3: Unprecedented Momentum In The Credit Union System
Callahan partner Jay Johnson gave a presentation about the credit union industry’s overall performance, calling 2015 “a milestone year.”
Credit unions reached an all-time high in membership, loan, and share balances and provided more than $410 billion in loans to more than 28 million members. Additionally, member relationships continue to reach new levels.
“Credit unions consider how they are growing and developing relationships with members,” Johnson says. “It’s not just about getting a product to them, it’s about helping them across the board.”
At year-end 2015, credit union membership exceeded 104 million and year-over-year annual membership growth hit 3.7%, the highest annual growth rate in at least six years.
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“That growth reflects the visibility of credit unions in the marketplace,” Johnson says. “Maybe more importantly, as members get disillusioned with what they see, particularly with their big bank relationships, they are finding real value in the credit union approach.”
Other high-level performance indicators include share balances topping $1 trillion, thanks to a 7% year-over-year growth rate driven primarily by core deposit products such as checking and savings accounts. Additionally, total year-to-date loan originations increased by 16% year-over-year due in large part to the 33% increase in first mortgages. The $125 billion originated in first mortgages is the highest total in the history of the movement.