By: Beth Gorry, Principal, Advisors Plus Consulting, PSCU
As we move into the new year, now is the time for credit unions to reflect on the significant changes and challenges of 2020, and look ahead to the new opportunities of 2021. Here’s hoping that we can collectively lift up our heads, without a constant need to triage everything – from the in-branch experience to supporting our member communities with loan forbearance – and proactively evaluate our operational footing while planning investments for growth.
With this in mind, PSCU’s Advisors Plus Consulting team has compiled our top five resolutions to help your credit union grow and prosper in 2021.
Resolution #1: Evaluate operational efficiency.
The key to providing a robust array of products at a cost that is palatable to your members is to ensure you are operating at maximum efficiency. Under normal circumstances, this is an assessment often overlooked, as we can tend to get entrenched in our everyday processes, procedures and tools. Bringing in a consultant as a fresh pair of eyes and leveraging their extensive experience can help. For instance, at Advisors Plus, our Card Operations and Servicing Analysis (COSA) Strategic Consultants provide an in-depth and comprehensive review of areas that could yield improved costs and efficiencies for credit unions.
Resolution #2: Lean into digital experiences.
A major change in member payment preference is the organic shift to digital. While face-to-face traditionally has been the primary method of engaging with and servicing members, the COVID-19 pandemic has pushed consumers into leveraging digital channels and solutions even more frequently. It’s critical to keep a pulse on these technical innovations and associated behavior trends, as your credit union won’t want to be left behind while your members continue to adopt digital tools and services.
Resolution #3: Assess your credit union’s CRM data for insights, segmentation and targeting.
As your members’ primary financial institution, no one knows more about them than your credit union. Your credit union possesses an enormous cache of data, from demographics to deposits. What can be particularly compelling in helping to predict your members’ needs is an analysis of their card transaction data, for both debit and credit. You can use analysis to find “look-alikes” for your highly engaged members. While leveraging all of your available CRM data to unlock their insights and build segments for targeting and treatments can take some significant analytical firepower, an experienced consultant can help.
Resolution #4: Initiate active marketing treatments
Credit unions are well aware that credit cards are not a passive product. They require a regular cadence of messaging and promotions to maintain member engagement. We know that the conditions of the past year drove up debit spend at the expense of credit. As the economic environment continues to improve, active treatments will be needed to promote your card product over others that may be in your members’ wallets, as well as new solicitations they may receive. We recommend planning your marketing budget and contact management strategy around this activity.
Resolution #5: Evaluate expansion via strategic opportunities.
Under normal circumstances, a steady percentage of credit unions evaluate mergers and acquisitions (M&A). While a recent Credit Union Times article noted a slower pace of mergers last year, the pace of mergers is expected to pick up this year. With high barriers to entry, it is more common for credit unions to expand their field of membership than to see new entrants. In addition, community banks have closed approximately 4,700 branches between 2011 and 2019. Closure of community bank branches and industry consolidation can create financial service gaps that leave populations without access to neighborhood services – which can expose communities to predatory lending and non-competitive deposit products.
As your credit union looks at its own growth opportunities, you may want to consider ways to achieve economies of scale, enter a new market or expand your footprint, or address specific issues such as succession planning, risk management or technology improvements. Making these resolutions to improve your operational efficiency and digital experiences, leverage your own data, promote engagement and evaluate your expansion opportunities can help. Resolve to get started now!
Beth Gorry is a principal of business relations for PSCU’s Advisors Plus Consulting. In this role, she focuses on expanding Advisors Plus services and solutions for PSCU’s Owner credit unions. Gorry has over 30 years of experience in the financial services industry.