How would you answer these four questions?
Mike Dionne, SVP/community markets, Americas at Finastra, a global company offering financial services software and cloud solutions, discusses obstacles and opportunities for credit union growth.
What are the main barriers for credit union growth?
The primary barriers to growth are not having the proper insight and tools: insight in the form of understanding the needs of the credit union’s membership and tools that help the CU reach that membership in the fashion the members prefer.
Credit unions have nearly unlimited growth opportunity with current members. Deepening those relationships represents a significant growth opportunity. Is this member part of a broader household? Where is this household in its financial life cycle? Understanding fundamental elements like these will inform the products and services your CU should be putting in front of members.
How the CU puts these products and services in front of the member is the second component in driving growth. The CU must have the tools to reach its members where and when members require. The most obvious example is in the digital arena. The migration of engagement from the physical to the digital world has been rapid. Has your CU kept up? For example, do you have the means of reaching your member with an informed cross-sell message on the member’s mobile device?
How should credit unions think differently about growth?
Historically many CUs have thought about growth in terms of entering new geographies, perhaps with a new branch. While physical locations will remain an essential component of CUs’ service offering, they are not always essential to enter new markets. CUs need to think long and hard about the cost and effort associated with building new locations. In the digital era, significant growth can be achieved without a physical presence.
What mistakes do CUs make when they want to grow?
Driving demand for your products and services is a big part of growth. However, responding to that demand in an expedited manner is essential for achieving growth. We’ve seen a number of credit unions develop new lending campaigns with strong response from their membership. But the campaigns fell short of expectations as the CU did not have the infrastructure in place to respond with timely decisions and fund the loans.
What are some positive CU growth stories you have seen?
Consumer’s Credit Union in Michigan fueled substantial growth through a creative program called Consumers@Work. Partner companies of Consumers CU invited the credit union in to educate employees with the intent of improving their financial well-being. Not only did this lead to a better educated consumer, it helped Consumer CU grow deposits and loans.
There is no one path to growth. The best day-to-day practice is simply a matter of educating yourself on the various paths your industry peers have taken.cues icon
Mike Dionne is SVP/community markets, Americas at Finastra, a global company offering financial services software and cloud solutions.